Bombay H.C : Whether, on the facts and in the circumstances of the case, the Tribunal was correct in upholding the action of the AAC allowing relief under s. 80J of the Act ?

Counsel Appeared

G.S. Jetly, A. Shelat & S.G. Aney, for the Revenue : C.J. Thakkar & N.J. Thakkar, for the Assessee

S.P. BHARUCHA, J.:

This reference arises at the instance of the Revenue and raises two questions : ” (1) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in upholding the action of the AAC allowing relief under s. 80J of the Act ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the assessee was entitled to deduction under s. 80J despite the fact that the requirements of s. 80J(4) were not fulfilled and the computation of capital was not made in accordance with r. 19A ? “

2. The answer to the second question has, counsel are agreed, to be given in the negative and in favour of the Revenue having regard to the judgment of the Supreme Court in Lohia Machines Ltd. vs. Union of India (1985) 44 CTR (SC) 328 : (1985) 152 ITR 308. The question is so answered.

3. The first question arises because of the following : The ITO had rejected the assessee’s claim to deduction under s. 80J, inter alia, on the ground that the assessee had not claimed it in its return. In appeal, the AAC held that since the claim had been made by the assessee during the course of the assessment proceedings, the ITO should not have rejected it. The Tribunal held that in so far as the Revenue’s appeal to it was concerned, the AAC was fully justified in entertaining the claim for deduction under s. 80J because the claim had been made by the assessee before the assessment was completed, i.e., during the assessment proceedings.

4. There is no doubt whatsoever that the Tribunal and the AAC were right in the view they took. The claim having been made in the course of the assessment proceedings, the ITO was obliged to entertain it and consider it on merits. The first question is, accordingly, answered in the affirmative and in favour of the assessee.

5. No order as to costs.

[Citation : 171 ITR 530]