9911796707
TMI Blog1985 (6) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... utation of its total income. In each of the said assessment years, there were no profits and gains. The assessee claimed further that the said 6% of its capital employed should be carried forward as deficiency under the said section for being set off against its profits and gains of the subsequent assessment years. Part of the capital of the assessee consisted of machinery purchased from a manufacturer in Japan on deferred payment basis. The assessee claimed that the quantum of the unpaid purchase price of the said machinery should be treated as money borrowed from an approved capital source for creation of capital assets in India and contended that the same should not be deducted from the capital value of its assets under rule 19A, subr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in twenty half-yearly instalments with the approval of the Reserve Bank of India was produced before the Tribunal which took note of the same and held that the second condition prescribed under rule 19A(3)(b) have also been fulfilled. In the premises, the Tribunal held that the assessee's claim should be accepted and the computation of its capital for the purpose of the said section 80J and the said rule 19A of the Rules should be revised for all the years. The Revenue applied under section 256(1) of the Act calling upon the Tribunal to draw up a statement of the case and refer six questions of law to this court. The questions suggested included the following "(a) Whether, on the facts and in the circumstances of the case, the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate a case on the said questions. In our view, it is not open to the Revenue in this reference to agitate on questions which have not been referred. On the question referred, the Tribunal has found as a fact that the assessee in obtaining capital assets from a foreign supplier on a deferred payment basis has borrowed from an approved source within the meaning of the Explanation to sub-rule (3) of rule 19A. The Tribunal has further found that the money borrowed is repayable over a period of not less than seven years. The said findings have not been challenged and have become final. It is not the case of the Revenue that on the facts found, rule 19A(3) read with the Explanation thereto will not apply. For the above reasons, the quest ..... X X X X Extracts X X X X X X X X Extracts X X X X
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