Section 80J capital computation and reference procedure: work-in-progress included, but new factual contention could not be raised.

Work-in-progress was treated as includible in the capital base for relief under section 80J, following an earlier High Court ruling on the same point. The article also notes that a contention that the carbon-di-oxide plant and the rectified spirit unit were separate industrial undertakings could not be raised in reference proceedings because the necessary factual material was absent and the issue had not been properly raised on the record before the assessing authority or Tribunal. The Tribunal's refusal to entertain that new ground was therefore upheld, and no further relief followed.

---

---

Issues: (i) whether the work-in-progress value was includible in the computation of capital for granting relief under section 80J of the Income-tax Act, 1961; (ii) whether the contention that the carbon-di-oxide plant and the rectified spirit unit were separate industrial undertakings could be raised in the reference proceedings.

Issue (i): whether the work-in-progress value was includible in the computation of capital for granting relief under section 80J of the Income-tax Act, 1961.

Analysis: The question was covered by an earlier decision of the Court which had already answered the same point on similar facts. In view of that binding answer, no fresh adjudication was required on the merits of inclusion of work-in-progress in the capital base for section 80J relief.

Conclusion: The issue stood concluded in favour of inclusion of work-in-progress in the capital computation for section 80J relief.

Issue (ii): whether the contention that the carbon-di-oxide plant and the rectified spirit unit were separate industrial undertakings could be raised in the reference proceedings.

Analysis: The record did not contain necessary factual material to support the contention, and the Income-tax Officer had treated both units as one industrial undertaking. The Tribunal had declined to entertain the new ground because it had not been raised on the basis of the assessment or rectification order and no supporting material had been placed before it.

Conclusion: The contention could not be raised in the reference proceedings and the Tribunal's refusal to entertain it was upheld.

Final Conclusion: The reference was answered without disturbing the Tribunal's approach, and no further relief was granted.

Ratio Decidendi: A new factual contention cannot be entertained in reference proceedings when the necessary materials are absent and the issue was not properly raised before the assessing authority or supported by the record.

---