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TMI Blog1984 (9) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses allocated to the distillery plant ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal erred in holding that the relief under section 80J of the Income-tax Act, 1961, read with rule 19A of the Income-tax Rules, 1962, should be worked out by aggregating the values of all the assets as on the first day of the computation period irrespective of the fact whether those assets were used during the accounting period or not ?" As far as question No. (2) is concerned, counsel for the Department has very fairly stated that the answer to be given to the said question is concluded, as far as this court is concerned, by its previous decision in CIT v. Alcock Ashdown Co. Ltd. [1979] 119 ITR 164. This is a decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... econd plant had not commenced manufacture even on the date on which the appeal was heard by the Tribunal. The total cost of the distillery plant came to Rs. 84 lakhs, whereas the cost of all the plants together was about Rs. 3.63 crores. The assessee company during the period of construction of the building and installation of plant had incurred certain common expenses in connection with such construction and erection. A list of such expenses totalling to Rs. 24,70,060 was filed before the Tribunal. These expenses were being carried forward in the balance-sheet as work-in-progress. Out of these expenses, Rs. 56,210 were allocated to building, plant and machinery of the distillery plant and claimed as part of its cost. The amount was made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de all expenditure necessary to bring such assets into existence and to put them in working condition. (See page 175 of the report.) According to the Supreme Court, the above rule of accountancy is required to be adopted for tax purposes in order to determine the actual cost of the assets in the absence of any statutory definition or other indication to the contrary in the Income-tax Act. If the principles enunciated in the above decision by the Supreme Court are applied to the facts of the case before us, question No. (1) will also be required to be answered in favour of the assessee. It would have to be held that both the Appellate Assistant Commissioner and the Tribunal were entirely right in allowing the full amount claimed by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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