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TMI Blog1979 (4) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... pital employed in the business. The AAC, followed the ruling of the Calcutta High Court in M/s Century Enka Ltd vs. ITO(1) accepted the assessee's claim and held that the loans amounting to Rs. 2,97,487 should be treated as capital employed in the business. Aggrieved by this order of the AAC the Revenue has come on appeal before us. 3. We heard the learned departmental representative and the learned counsel for the assessee. 4. The learned departmental representative's main grievance was that in view of the Supreme Court decision in Addl. CIT, Gujarat vs. Gurjargravures P. Ltd.(2), the AAC ought not have entertained the assessee's claim for not excluding the borrowed money in computing the capital for purposes of deduction under s. 80J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t should have been answered in the negative." From the above passage it is clear that the Supreme Court was not dealing with a case where there was evidence on record to support the claim made by the assessee or with a case where a claim was made but there was no evidence or insufficient evidence. On the other hand, it was made clear that in that case the assessee did not make any claim before the ITO and there was also no material on record to support such a claim. In the instant case, there was enough material to support the assessee's claim even before the ITO. In fact, in the annexure to the assessment order in working out the 80J relief, the ITO has referred to the sum of Rs. 2,97,487 as secured loans. The Andhra Pradesh High Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of the Madras High Court in Madras Industrial Linings Ltd. vs. ITO (4) in which their Lordships of the Madras High Court found support for the decision of the Calcutta High Court reported in 107 ITR 909. The Hon'ble Madras High Court held in the above case that there is no reason to give the expression "capital employed" in s. 80J of the Act a meaning different from what it means in ordinary parlance, viz., the amounts that have become capital in the business. Their Lordships further hold that the capital can be that which a company possessed, namely, share capital or other moneys belonging to the company which may also be moneys borrowed by the company. Their Lordships concluded by saying that the plain meaning of s. 80J is that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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