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K.P. Varghese vs The Income Tax Officer,Ernakulam, And ... on 4 September, 1981

We have already referred to the observations of the Supreme Court in K.P. Varghese's case (supra) about eschewing literal interpretation if it leads to manifestly absurd results. In our opinion, an interpretation which results in a situation which has never been contemplated in the past under similar provisions of the Act cannot be accepted. We cannot interpret the expression "next following 1st April 1948" to mean that such period should be counted from 2nd April 1948 and should end on 1st April 1981. It is not clear whether the period of one year in such interpretation would be a period of 365 days or a period of 12 months. Further, this interpretation would mean that this type of relief was not intended for those industries which started manufacturing on 1st April 1948. All along in the past this period has always been counted in terms of financial years as we have seen while discussing the history of the section in the foregoing paragraphs. We cannot ignore this aspect of the matter. For these reasons, we hold that relief Under Section 80J is not available to the Krilo Unit which started manufacturing on 1-4-1981. This ground is, therefore, rejected.
Supreme Court of India Cites 26 - Cited by 3460 - P N Bhagwati - Full Document

Tata Iron & Steel Co. Ltd. vs N.C. Upadhyaya And Anr. on 5 March, 1973

9. In reply, Shri Dastur argued firstly that circular No. 281 need not be followed. According to Shri Dastur, if a circular says something against the assessee, such circular cannot be said to be laying down the law. A circular which imposes a burden need not be followed. For this proposition, Shri Dastur relied on the Bombay High Court decision in Tata Iron & Steel Co. Ltd. v. N.C. Upadhyaya [1974] 96 ITR 1, and the observations at page 17. Meeting Shri Agarwal's argument about reduction of period from 33 years to 31 years consequent to exclusion of item 26 from the Eleventh Schedule, Shri Dastur pointed out that item 26 was omitted from 1-4-1982 and such omission did not affect the appellant, since we were concerned with an earlier accounting period. In support of this argument, Shri Dastur referred us to circular No. 308 dated 29-6-1981 containing explanatory notes on Finance Act, 1981. In particular, Shri Dastur relied on paragraphs 19.1 to 19.3 dealing with amendment of Eleventh Schedule (pages 898 and 899 of Taxmann's Direct Taxes Circular, Vol. III). Shri Dastur argued that there was a fundamental change in the language introduced from the Finance (No. 2) Act of 1967. While commenting on the legislative history, Shri Dastur referred to the Board's circular No. 281 relied upon by the Departmental representative and pointed out that the Board was not clear or consistent while issuing circular No. 281 dealing with the scope of the new Section 80-1. As an illustration of what he meant by lack of clarity or consistency in what the Board wanted to say, he referred para 19.3 of this circular (pages 2712-2713 of Vol. Ill of Sampat lyengar's Law of Income-tax, 7th Edition). In this para, the Board has stated that the existing tax holiday provisions will apply to new industrial undertakings which go into production before 1-4-1981 or approved hotels which start functioning before that date or new ships which are brought into use on or before that date. This indicated that even the Board felt that the existing tax holiday provisions, namely provisions of Section 80J, could be made applicable to new ships which are brought into use on 1-4-1981. This gave reason for a doubt that the same interpretation could well be put in respect of an industrial undertaking which commenced production on 1-4-1981. Shri Dastur argued that if there was a doubt regarding the language of the section, such doubt should be resolved in favour of the taxpayer.
Bombay High Court Cites 24 - Cited by 52 - Full Document
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