Full-year section 80J relief and loss carry-forward upheld by applying the view favourable to the assessee.

Full-year relief under section 80J was allowed where the industrial undertaking was set up during the accounting period, as the prevailing precedent supported allowance for the whole year and not merely on a prorata basis for the period of actual operation. The assessee was also entitled to carry forward the loss despite delayed filing of the return, because the authority applied the settled approach that where conflicting judicial views exist, the interpretation favourable to the assessee should be preferred. Both revenue objections failed, and the appellate relief was sustained.

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Issues: (i) whether relief under section 80J was allowable for the full year or only on a prorata basis for the period of the accounting year during which the industrial undertaking functioned; (ii) whether the assessee was entitled to carry forward the loss despite the return having been filed after the prescribed date.

Issue (i): whether relief under section 80J was allowable for the full year or only on a prorata basis for the period of the accounting year during which the industrial undertaking functioned.

Analysis: The undertaking was set up during the accounting period and the relief had been granted by the assessing authority only for the period for which the business was carried on. The appellate authority relied on the existing view supporting full-year relief, and that view was accepted as covering the point.

Conclusion: The relief under section 80J was correctly allowed for the whole year, in favour of the assessee.

Issue (ii): whether the assessee was entitled to carry forward the loss despite the return having been filed after the prescribed date.

Analysis: The appellate authority followed judicial precedent holding that where there are conflicting views, the interpretation favourable to the assessee should be preferred, and relied on authority supporting carry forward of the loss notwithstanding the delayed filing.

Conclusion: The assessee was entitled to carry forward the loss, in favour of the assessee.

Final Conclusion: Both grounds raised by the revenue failed and the assessment relief granted by the appellate authority was sustained.

Ratio Decidendi: Where two judicial views are available on an income-tax issue, the view favourable to the assessee may be preferred, and relief under section 80J is not to be restricted merely because the undertaking functioned only for part of the accounting period when the applicable precedent supports full allowance.

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