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TMI Blog1987 (1) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... ction for 3 years, namely, assessment years 1977-78 to 1979-80. Thereafter the business of the firm is taken over by the assessee vide deed of retirement dated 17-1-1979 with effect from 1-1-1979. Various assets and liabilities of the business of the firm are taken over by the assessee at their book value. The dispute in this appeal is restricted to the value of plant and machinery taken over by the assessee at their book value at Rs. 4,44,467 whereas its written down value as per the income-tax records of the firm was Rs. 3,54,666. The assessee claims that in computing the capital employed for the purpose of section 80J, the sum of Rs. 4,44,467 has to be included as according to him it is the cost of acquisition for which the assessee had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r submitted that the ITO himself had adopted the book value of Rs. 4,44,467 for the purpose of granting depreciation. Having adopted the book value for the purposes of granting depreciation, the ITO was not justified in changing the view while computing the capital employed for the purposes of section 80J. He also placed reliance on the decision of the Tribunal, Chandigarh Bench in the case of Lekh Raj Narinder Kumar v. ITO [1986] 16 ITD 452 allowing depreciation on the value of the assets at which the assessee got them from the firm on its dissolution. The learned departmental representative, on the other hand, submitted that the lower authorities were justified in rejecting the claim of the assessee. Deduction under section 80J is availab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e person carrying on the business, the nominal amount of those debts; (v) in the case of assets, being cash in hand or bank, the amount thereof. Explanation 1: In this clause and in clause (III), 'computation period' means the period for which profits and gains of the industrial undertaking or business of the hotel are computed under section 28 to 43A. Explanation 3 : In this clause and in clause (V) 'written down value' has the same meaning as in clause (6) of section 43. Explanation 4: Where the cost of any asset has been satisfied otherwise than in cash, the then value of the consideration actually given for the assets shall be treated as the actual cost of the asset". Section 43(1) reads as under: "(1) 'actual cost' m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation was not deductible in determining the written down value for the purposes of the said clause (vi)." On a careful reading of the provisions aforesaid, two things are certain. One is that section 80J (1A) provides for the computation of capital employed in an industrial undertaking. Section 43, on the other hand, provides for the determination of the actual cost of an asset for granting depreciation. In this respect, each operates in a different filed. Where the assessee and the industry are identifiable with respect to full period of ownership, there would be no difficulty in ascertaining the actual cost or the written down value for the purposes of computing capital employed or for granting depreciation. In that case, both the figur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount which is the actual cost whereas section 80J deduction is allowed to an industry with reference to the amount which is its cost of acquisition or its written down value. The emphasis given by the assessee's representative on the words appearing in section 43(1), viz., 'the actual cost of an assessee' is devoid of force. When the definition of a particular term is adopted at different places its meaning has to be understood with necessary adaptation or changes in paints of detail. This is called the rule of mutatis mutandis. We should not forger the context in which the meaning of the term is adopted. When a law directs that a provision made for certain type of cases to apply in another type of case, it has to mean that it shall appl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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