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TMI Blog1984 (10) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 80J vide the Finance (No. 2) Act, 1980. In appeal, it was confirmed by the Commissioner (Appeals) in view of the retrospective amendment carried out in section 80J by the Finance (No. 2) Act, 1980. 3. The assessee, being aggrieved and dissatisfied with the impugned order on the issue, has preferred this appeal. Shri N. Devanathan, the counsel for the assessee, relying upon the grounds of appeal, contends that section 80J relief is to be given to the assessee as claimed. He further contends that section 80J relief is to be computed on the capital employed, including the borrowing. Reliance is placed on the decision in the case of Madras Industrial Linings Ltd. v. ITO [1977] 110 ITR 256 (Mad.). On the other hand, the departmental representative contends that the Hon'ble Madras High Court's decision is not applicable to the facts of the case, as the amended section was not there before their Lordships of the Madras High Court in deciding the aforesaid case. Furthermore, the decision of the Hon'ble High Courts in the cases of CIT v. Toshiba Anand Lamps Ltd. [1984] 145 ITR 563 (Ker.), Traco Cable Co. Ltd. v. CIT [1982] 138 ITR 385 (Ker.) and CIT v. K.N. Oil Industries [1982] 134 I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the majority view of the High Courts and the Benches of the Tribunal are that the relief under section 80J is to be determined in accordance with the provisions of the amended section 80J. In the case of Toshiba Anand Lamps Ltd., their Lordships of the Kerala High Court held, on following its own decision in Traco Cable Co. Ltd.'s case, that in view of the amendment of section 80J by the Finance (No. 2) Act, 1980, with retrospective effect from April 1, 1972, amounts borrowed for capital will have to be deducted in determining the capital employed for the purpose of section 80J for the assessment years 1972-73 and 1973-74. 5. In the case of K.N. Oil Industries, the Madhya Pradesh High Court held as under : " After the amendment of section 80J by the Finance (No. 2) Act, 1980, with retrospective effect from 1-4-72, borrowed monies and debts owed by an assessee are to be excluded in computing the capital employed in an industrial undertaking for granting relief under the provision. Therefore, for the assessment year 1973-74, an assessee is not entitled to relief under section 80J on the basis of the gross capital without deducting the value of the borrowed capital employed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal deemed it fit to remit the matter back to the ITO for recomputation of the profit under section 80J after the decision of the Supreme Court or the Madras High Court is available, whichever is earlier. In coming to the above conclusion, the Tribunal relied on the order of the Gujarat High Court in the case of CIT v. Surat District Co-operative Milk Producers Union Ltd. [IT Application No. 81 of 1982], in which the same procedure adopted by the concerned Bench of the Tribunal, to remit the matter back to the Commissioner (Appeals) with a direction to recompute the profit after the pronouncement of the decision of the Supreme Court on the vires of the retrospective amendment, was approved by the Gujarat High Court, as being only with a view to save public time and cost. The Tribunal in its order also referred to K. N. Oil Industries' case and Traco Cable Co. Ltd.'s case, relied on by the department, cited in the Judicial Member's order and stressed that in these cases, the specific question, as posed before the Gujarat High Court, was not raised. 2. It may also be stressed here that the issue before us relates only to a question of procedure and not of law. The Madras Benches ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner (Appeals) and the Income-tax Officer regarding the computation of the deduction under section 80J of the Income-tax Act, 1961, and section 80J of the Income-tax Act, 1961, and restoring the matter to the Income-tax Officer for recomputation of the profit after the decision of the Supreme Court or the Madras High Court, regarding the retrospectivity of the amended section 80J [as amended by section 17 of the Finance (No. 2) Act, 1980] becomes available ?" 2. In the course of the assessment proceedings for the assessment year 1978-79, the contention of the assessee-company before the ITO was that its liabilities should not be deducted from the value of the assets employed by it in the new industrial undertaking for the purpose of computing its capital under section 80J. In view of the provisions of section 80J, as retrospectively amended by the Finance (No. 2) Act, 1980, the ITO rejected the contention of the assessee. On appeal, the Commissioner (Appeals) confirmed the order of the ITO. Aggrieved by this order of the Commissioner (Appeals), the assessee came up in appeal before the Tribunal. 3. After hearing the parties, the learned Judicial Member was of the view that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The latter agreed with the view of the learned Accountant Member to the effect that the case should be restored to the ITO for deciding the same afresh, after awaiting the final outcome of the decision of the Supreme Court or the Madras High Court, as the case may be, on the constitutional validity of the amendment of section 80J. While arriving at his conclusion, the Third Member relied upon the decision of the Gujarat High Court in the case of Surat District Co-operative Milk Producers Union Ltd. In the last mentioned case, the procedure adopted by the Tribunal in remitting the matter back to the Commissioner (Appeals), with a direction to re-decide the case after the decision of the Supreme Court on the vires of the retrospective amendment, was approved by the High Court. 7. There is no good reason to depart from the majority view of the Tribunal in the aforesaid cases of Secals Ltd. and Simco Meters Ltd. It has been held by the Madras High Court in CIT v. L.G. Ramamurthi [1977] 110 ITR 453 and CIT v. S. Devaraj [1969] 73 ITR 1 that when the Tribunal takes a particular view on a particular issue, it should not subsequently contradict itself by taking a diametrically opposite ..... X X X X Extracts X X X X X X X X Extracts X X X X
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