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TMI Blog1985 (9) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... ief admissible to the assessee company under section 80J of the Income-tax Act, 1961, read with rule 19A of the Income-tax Rules, 1962, for the assessment year 1969-70 ? " The relevant facts are that the assessee is a company incorporated under the Companies Act, 1956. The year of assessment, which is relevant for our purposes, is 1969-70 for which the relevant previous year is the one ended on March 31, 1969. During that year, the assessee was manufacturing and selling welding electrodes. In connection with the setting up of the Madras unit of the assessee, the assessee in working out the capital employed for setting up that unit at Rs. 43,15,085 had included an amount of Rs. 6,73,500 described as " unallocated capital expenditure ". It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the year under consideration would not alter the character of the expenditure. On an appeal preferred by the Revenue to the Tribunal, it was argued by the departmental representative that under rule 19A of the Income-tax Rules, 1962, for the said amount to be included in the capital computation, it was necessary that it should have represented fixed assets used in the assessee's business as on March 31, 1968. Following its earlier decision, the Tribunal took the view that the said sum of Rs. 6,73,500 which had not been allocated during the year against building and machinery and plant was includible for the purposes of calculation of capital for computing the deduction under section 80J of the said Act. It is to test the correctness of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of Rs. 21,17,178 being the aggregate of the two amounts referred to by us earlier for determining the capital employed in its new industrial undertaking for the purpose of granting relief under section 84 of the said Act. In view of this decision, it appears to us that the assessee is entitled to the benefit of the inclusion of the said amount of Rs. 6,73,000 in the computation of the capital employed for the purposes of section 80J of the said Act. Mr. Jetly, learned counsel for the Commissioner, advanced only one short argument, and that was that as the said amount had not been allocated between plant and machinery and building, to that extent it was difficult to work out the depreciated written down value and hence the amount sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose of calculation of the capital employed in an industrial undertaking, it would be the written down value of the asset which would be taken into account in the case of assets entitled to depreciation. As we have pointed out, the submission of Mr. Jetly is that, in the case of an unallocated amount like this, it would be difficult to calculate the value of the asset or assets to which the said amount might be allocated and hence that amount Should not be included in the computation of the capital employed. This argument has to be rejected at once. In the first place, the consideration that it might be difficult to calculate the written down value of an asset would be no ground for not including its value in the computation of the capital, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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