9911796707
TMI Blog1996 (3) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... the court was delivered by B. N. KIRPAL J.-- In this appeal (see [1979] 118 ITR 544 (Guj)), the only question which arises for consideration is with regard to the scope and interpretation of section 80K of the Income-tax Act, 1961 (hereinafter referred to as "the Act"). The appellant is a public limited company and is engaged in the manufacturing of textiles, chemicals, etc. It established a new industrial undertaking by installing a polyester fibre plant at Baroda in the accounting year of 1974-75, relevant to the assessment year 1975-76. In the subsequent accounting year 1975-76, the appellant also installed a new Sulzer plant at Ahmedabad. Both the aforesaid plants fulfilled all the conditions for the grant of necessary relief und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax Officer under section 197(3) read with section 80K of the Act requesting for a certificate under the said section 80K. According to the appellant, the relief claimed was Rs. 1,00,35,434 for the Baroda plant and Rs. 24,07,556 for the Sulzer plant. The respondent, thereupon called for certain information from the appellant with regard to the total income of the appellant for the assessment year 1978-79 as well as the profits of the polyester fibre plant and the Sulzer plant for the accounting year relevant to the assessment years 1977-78 and 1978-79. The appellant-company replied that the total income of the company for the assessment year 1978-79 was nil and there were carried forward losses, depreciation, etc., in respect of the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent should be directed to issue a certificate for Rs. 95,50,889 in respect of the polyester fibre plant and the Sulzer plant. The High Court of Gujarat, by the impugned judgment dated January 29, 1979 (see [1979] 118 ITR 544), came to the conclusion that in respect of the previous year relevant to the assessment year 1978-79, the Sulzer plant, which was a new undertaking, had no assessable profits and gains and, therefore, the benefit under section 80K could not be granted in respect of the relevant amount of capital employed in that plant during that particular previous year. In arriving at the aforesaid conclusion, the High Court observed that the decision of this court in the case of Union of India v. Coromandel Fertilizers Ltd. [1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat in the light of the interpretation placed on the scheme of section 80J by the three-judge Bench in Patiala Flour Mills Co.'s case [1978] 115 ITR 640 (SC) and Rajapalayam Mills' case [1978] 115 ITR 777 (SC) which interpretation was not present when this court decided Coromandel Fertilizers' case [1976] 102 ITR 533, the provisions of section 80K were not applicable when the profits and gains derived by the company from a new industrial undertaking when computed under the provisions of the Income-tax Act are nil or show a loss. In our opinion, there is no justification for the High Court not to have followed the decision of this court in Coromandel Fertilizers' case [1976] 102 ITR 533. It is not in dispute that there was an entitlement t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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