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TMI Blog1999 (7) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the circumstances of the case, the Tribunal was justified in law in holding that the fixed deposit of Rs. 5,13,36,000 should be included in the capital employed for the purpose of section 80J of the Income-tax Act, 1961 ?" In the first original assessment, the assessee claimed a sum of Rs. 1,45,206 representing expenditure on incomplete capital jobs, should be taken into account in the capital employed for the purpose of section 80J of the Income-tax Act, 1961. Similarly, the assessee claimed a sum of Rs. 5,13,36,000, which was in the bank as fixed deposit should also be treated as capital employed for the purpose of section 80J of the Act. The Income-tax Officer did not allow the claim of the assessee. The Appellate Assistant Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal has confirmed the order of the Commissioner of Income-tax (Appeals) on both the issues. After hearing learned counsel for the parties, we are surprised that the Income-tax Officer has ignored the direction of the appellate authority. Such type of attitude of the Income-tax Officer shows that either he is dishonest or ignorant of the basic terms of judicial propriety. On the merits, various High Courts have decided the issues in favour of the assessee, including this High Court. Question No. 1 relates to the issue whether expenditure on incomplete plant and machinery can be allowed for computing the capital employed for the purpose of section 80J of the Act. In the case of CIT v. Union Carbide India Ltd. [1987] 165 ITR 546 (Cal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 80J. Learned counsel Mr. Khaitan brought to our notice the decision of the Allahabad High Court in CIT v. U. P. Poorvanchal Vikas Nigam [1996] 218 ITR 697. This court has also considered this issue in Phillips Carbon Block Ltd. v. CIT [1982] 136 ITR 205 (Cal). Even the Gujarat and Bombay High Courts in CIT v. Gujarat Mineral Development Corporation [1981] 132 ITR 377 and CIT v. United Carbon India Ltd. [1991] 190 ITR 622, have answered the question in favour of the assessee, i.e., if some amount is for the time being deposited as short-term deposits that can be treated as capital employed for the purpose of section 80J. Following our view expressed in Phillips Carbon Block Ltd.'s case [1982] 136 ITR 205 (Cal), we answer the questio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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