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TMI Blog1989 (9) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction of surtax payable by it in pursuance of the Companies (Profits) Surtax Act, 1964, in arriving at the taxable income ? (2) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that, for the purpose of computing capital employed for deduction under section 80J, liabilities are not to be deducted ? (3) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that, for the purpose of relief under section 80J, the computation of capital should be based on average amounts of increase/decrease in the assets and liabilities during the relevant previous year?" The brief factual matrix is that the assessee is a limited comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-of the assets and liabilities as on the first day of the previous year. The Tribunal also accepted the additional ground raised by the assessee that, for the purpose of computing relief under section 80J, the original cost of the fixed assets be taken into account in the computation of the capital employed and not their written down value. We have heard learned counsel for the parties, besides perusing the relevant record. The controversy whether the assessee was entitled to deduction of surtax while computing its taxable income for the relevant assessment year is not only covered by the decision of this court in Highway Cycle Industries v. CIT [1989] 178 ITR 601, but also by the decisions of the Calcutta High Court and the Gujarat High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alue of the ship as reduced by the aggregate of the amounts owed by the assessee as on the computation date on account of monies borrowed or debts incurred in acquiring that ship must be held to be valid as being within the rule-making authority of the Central Board. Since, on the view taken by us, rule 19A did not suffer from any infirmity and was valid in its entirety, the Finance (No. 2) Act of 1980 in so far as it amended section 80J by incorporating rule 19A in the section with retrospective effect from 1st April, 1972, was merely clarificatory in nature and must, accordingly, be held to be valid." Thus, in the light of the above-referred decision of the Supreme Court, both these questions are answered in the negative, i.e., in favou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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