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TMI Blog1988 (8) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... the deduction as claimed as claimed by it should be allowed. In the assessment framed u/s. 143(3) r. w. s. 144B of the Act, the ITO had accepted the assessee's contention, in view of the stay granted by the Supreme Court in the following manner : "12. The assessee-company has claimed 80J relief on the gross amount of the assets without deducting any liability. The law has been amended with retrospective effect by Finance (No. 2) Act, 1980 according to which liabilities to be deducted from the capital employed so as to compute the correct amount for 80J. However, the assessee-company has obtained stay from the Supreme Court against invoking provisions of amended act. Respectfully following the Supreme Court's stay, 80J allowance has been allowed on the gross value which will be rectified after the receipt of Supreme Court's order if necessary. 14. 80J allowance comes out to be as follows : Unit No.2 5th year Rs. 3,94,717 Unit No.3 3rd year Rs. 1,82,981 Unit No.4 2nd year Rs. 1,84,543 Unit No.5 1st year Rs. 31,858 Since there is loss of Unit Nos. 4 and 5, 80J relief has been allowed to be car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tance in the contention of Shri V. R. Shah. The ITO has only amended the regular assessment originally framed. It does not cease to be a regular assessment after passing the order under sec. 154 by the ITO in order to give effect to the judgment of the Hon'ble Supreme Court. Therefore, it is within the powers of the ITO to withdraw the interest allowed to the assessee under sec. 214. Under the circumstances, no interference in called for." 6. Being aggrieved by the order of the CIT (A), the assessee has come up in appeal before the Tribunal. In order to better appreciate the rival contentions, the position that emerges after orders passed under sections 143(3) and 154 of the Act are tabulated below : ------------------------------------------------------------------------- As per order u/s As per order u/s. 143 (3) dtd. 5-9-1983 154 dtd. 26-2-1985 Rs. Rs. ------------------------------------------------------------------------- Total income assessed 46,35,610 48,88,822 Tax at 55 per cent 25,49,585 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the assessee had challenged the constitutional validity of certain provisions of section 80J of the Act and the Rules made thereunder before the Hon'ble Supreme Court in its writ jurisdiction and not by way of an appeal or a reference. He also submitted that the ITO would be justified in taking action under section 154 of the Act, where he follows a decision of the Hon'ble Supreme Court in some other case and but not in the assessee's case itself. 8. Inviting our attention to the provisions of section 214 of the Act, as they stood prior to the amendment made therein by the Taxation Laws (Amendment) Act, 1984 (in short TLA 1984) as well as subsequent thereto, the learned counsel for the assessee vehemently argued that since we are dealing with the assessment year 1980-81, the ITO was not justified in withdrawing a part of the interest granted to the assessee under that section as it stood on the first day of April, 1980. He also stressed the point that the Amendment made in that section by TLA 1984 prospective and effective from 1-4-1985. 9. The learned counsel for the assessee was fair enough to state that he was aware of the Full Bench decision of the Hon'ble Gujarat High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. However, since the assessee had obtained a stay from the Hon'ble Supreme court, the ITO had no choice but to asst. order with such remarks, so as to protect the interest of the revenue. He strongly stressed the point that there was a clear understanding between the assessee and the ITO that the issue regarding deduction under section 80J of the Act would be rectified after the receipt of the decision of the Hon'ble Supreme Court, if necessary. He, therefore, strongly urged that in the instant case, it is not necessary to discuss the scope of the provisions of sections 154 and 214 of the Act, as well as the effect of certain amendments made in section 214 of the Act by TLA 1984, as was argued on behalf of the assessee. Finally, he submitted that since the decision of the Hon'ble Gujarat High Court in the case of Bardolia Textile Mills is binding on us the fact that the other two Hon'ble High Courts have taken a different view would not be of any consequence in deciding the point at issue. He, therefore, urged that we should uphold the action of the IT authorities. 11. We have considered the rival submissions of the parties and we are constrained to observe that the assessee oug ..... X X X X Extracts X X X X X X X X Extracts X X X X
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