High Court Of Allahabad
CIT vs. Lohia Machines (P) Ltd.
Section 80J
B.P. Jeevan Reddy, C.J. & S.R. Singh, J.
IT Ref. Nos. 161 & 164 of 1979
6th March, 1991
BY THE COURT:
Under s. 256(1) of the IT Act, 1961, the Tribunal has stated the following question : “Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that loans taken should not be excluded from the assessee’s capital for working out deduction under s. 80J ?”
2. The assessee here is Lohia Machines Pvt. Ltd. In the case of this very assessee, the Supreme Court, in Lohia Machines Ltd. vs. CIT (1985) 44 CTR (SC) 328 (SC): (1985) 152 ITR 308 (SC), held that borrowed capital cannot be taken into consideration and cannot be included in the assessee’s capital for working out the deduction provided under s. 80J of the IT Act. Following that decision, the question referred is answered in the negative, i.e., in favour of the Revenue and against the assessee.
[Citation: 193 ITR 249]
