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TMI Blog1982 (3) TMI 194X X X X Extracts X X X X X X X X Extracts X X X X ..... J relief. ITO rejected assessee's contention that plant B had been started only in asst. yr. 1976-77 and he held that actual investment in plant B was made in asst. yr. 1975-76 when the assessee had claimed depreciation and development rebate and, therefore, according to him the year under consideration (asst. yr. 1977-78) is the third year of 80J relief. CIT(A) accepted assessee's contention that the year under consideration was second year of 80J relief because ITO had allowed 80J relief on plant B for the first time in asst. yr. 1976-77. 3. Learned Deptl. Rep. at the hearing before us filed details of depreciation claimed by assessee on plant B in asst. yr. 1975-76 which according to him were allowed. He, therefore, urged that the year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore different than the tests for allowing deduction under s. 80J. It was pointed out that s. 80J deduction was factually never allowed for asst. yr. 1975-76 and the same position obtained even as of today. Reliance was placed on (1979) 11 CTR (Guj) 139 : (1980) 123 ITR 669 (Guj) that without disturbing the relief granted in the initial year, ITO cannot examine the question again. 4. We have considered the submission of both the parties and we are unable to accept revenue's submissions. It is quite clear that for the purpose of allowing deduction under s. 80J the year under consideration was second year and not third year. 5. Revenue's next ground is that ITO was justified in excluding the cost of assets used for scientific resear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be used for scientific research related to that business and urged that the legislative intention was clear that there was a dichotomy between user in the business and user for scientific research and as user for scientific research was not user for business, therefore, the assets used for scientific research could not be considered as part of the assets employed in the business of the industrial undertaking. 7. Learned counsel for the assessee urged that the contention raised by the ld. Deptl. Rep. before us had been specifically rejected by Tribunal, Special Bench, Bombay in ITO vs. Vickers Sperry of India (in ITA Nos. 2035-6/Bom/77-78) where it was held that assets used for scientific research (related to the business) could be said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 35 may not be for the purpose of business. However, we need not go into this question as no such factual finding has been given by the lower authorities regarding the scientific research assets we are considering. It is therefore assumed on the facts of this case that scientific research assets are used for the purpose of the business. We, therefore, uphold the order of CIT(A) that value of such scientific research assets is to be included for computing the capital employed in the business for purposes of s. 80J. 9. Revenue's next grievance is against CIT(A)'s directions regarding weighted deduction under s. 35B on foreign travel expenses of technical director of Rs. 63,413. ITO had rejected the claim on the ground that technical director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 4,83,540 to Goodlass Nerolack, on which it incurred a loss of Rs. 7,340 and further expenses on account of commission payment of Rs. 24,177. ITO held that both the items were capital loss. CIT(A) varied the finding to hold that they were short term capital loss against which finding revenue is aggrieved. From the details filed before us it is seen that the said diesel generator was purchased in 1974 and the same was not installed and no depreciation was claimed on the said generator and same was sold on 26th Nov., 1976 at a loss of Rs. 7,340. As under s. 2(42A) short term capital asset meant a capital asset held by an assessee for not more than 60 months immediately preceding the date of its transfer, we uphold the direction of CIT (A) to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as no compelling necessity to incur such expenditure and that the three tests laid down in Gordon Woodroffe Leather Mfg. Co. (1962) 44 ITR 551 (SC) had to be read disjunctively. It was urged that the last test in the latter case was satisfied, viz., that the payment was made on ground of commercial expediency and in order indirectly to facilitate the carrying on of the business of the assessee. 13. We have carefully considered submissions of both the parties and we accept assessee's contention and accordingly uphold the order of CIT (A) on this point. 14. Last ground in Revenue s appeal is against CIT (A)'s directions restricting the disallowance under s. 80VV at Rs. 3,400 as against Rs. 7,000 disallowed by ITO. The assessee company had ..... X X X X Extracts X X X X X X X X Extracts X X X X
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