Bombay High Court
Commissioner Of Income-Tax vs Lubrizol (India) Ltd. on 20 August, 1990
Equivalent citations: [1991]189ITR703(BOM)
Author: Sujata V. Manohar
Bench: Sujata V. Manohar
JUDGMENT T.D. Sugla, J.
1. The Department has sought to raise three further questions as questions of law by way of this notice of motion. The questions are :
"(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in ignoring rule 19A and in interpreting the expression 'capital employed in the industrial undertaking' occurring in section 80J of the Income-tax Act, 1961, to mean the total value of the assets of the new industrial undertaking ?
(2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the deduction available under section 80J of the Income-tax Act, 1961, should be computed on the basis of the capital employed at the end of the revelent previous year ignoring rule 19A which provides that such deduction should be calculated on the basis of the capital employed in the new industrial undertaking as on the first day of the relevant previous year ?
(3) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in treating rule 19A as non est ?"
2. The Tribunal, it may be stated, has already referred to this court one question, namely :
"Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the gross value of the assets of the industrial undertaking without deducting therefrom any sum by way of liabilities should be taken as the 'capital employed' in the new industrial undertaking ?"
3. It appears that the Tribunal passed its appellate order in Income-tax Appeals Nos. 2338 and 2762 (Bom) of 1980 on September 7, 1982. Thereafter, the Department filed an application for rectification of the said order on the ground that the decision relied upon by the Tribunal in its appellate order was reversed by the Supreme Court in the case of Lohia Machines Ltd. [1985] 152 ITR 308. However, the Tribunal held that the proceedings before it pertained to the assessment years 1970-71 and 1971-72 and that the provisions considered by the Supreme Court in Lohia Machines Ltd. [1985] 152 ITR 308 were the provisions which came into effect from April 1, 1972, in view of the retrospective amendment of section 80J with effect from April 1, 1972. So observing, the Tribunal held that its appellate order did not suffer from any mistake rectifiable under the Act.
4. The three questions in respect of which this notice of motion is taken out by the Department arise out of the aforesaid order of the Tribunal on its miscellaneous application. The question, thus, is whether, as a result of the Supreme Court decision in Lohia Machines Ltd. [1985] 152 ITR 308, the appellate order of the Tribunal suffers from a mistake apparent from the record so that it could be rectified under the Act. The question, to say the least, is debatable as the Supreme Court admittedly did not consider the provisions as obtained before March 31, 1971. Under the circumstances, the questions of law sought to be referred cannot be raised in this reference. In any event, the real controversy between the Department and the assessee is covered by the question already referred. Notice of motion is, accordingly, dismissed.
5. No order as to costs.