Deduct Loans for Relief under Section 80J: High Court Decision

The High Court of Allahabad held that loans taken by the assessee must be deducted when calculating its capital for relief under section 80J of the Income-tax Act, 1961. The ruling was based on the Supreme Court case Lohia Machines Ltd. v. Union of India [1985] 152 ITR 308, resulting in a decision in favor of the Revenue and against the assessee.

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The High Court of Allahabad ruled that loans taken by the assessee must be deducted while computing its capital for determining relief under section 80J of the Income-tax Act, 1961. The decision was based on the Supreme Court case Lohia Machines Ltd. v. Union of India [1985] 152 ITR 308. The judgment favored the Revenue and went against the assessee.

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