TaxTMI 
TaxTMI 
1982 (6) TMI 137
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.... respect of relief under section 80J, the dispute relates to the question of treatment to be accorded to borrowed capital in ascertaining the capital base for the purposes of relief. The second dispute relates to the decision of the ITO that he cannot allow relief under section 80J if the relief under section 80HHA exceeds the relief under section 80J. On both these issues, the first appellate authority confirmed the view of the ITO. The assessee is, therefore, in second appeal. The learned counsel argued that the validity of the retrospective amendment authorising the exclusion of borrowed capital for capital base in the Finance (No. 2) Act, 1980 is pending adjudication before the Supreme Court and the other High Courts. As for the view of....
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....ustries. As this can be regarded as a manufacture, the deductions under sections 80HHA and 80J are allowable. Rs. Rs. (a) Deduction under section 80HHA : Deduction claimed is allowed 9,444 (b) Deduction under section 80J : Capital employed as per assessee's estimate 1,79,992 Deduct : Debts due by assessee 77,319 -------------- 6 per cent thereon : 6,160 1,02,673 As relief under section 80HHA exceeds the amount of relief under section 80J, and as only the balance after deduction of section 80HHA relief is to be allowed, the relief under section 80J is nil. Nil 9,444 -------------- 37,774 (c) Investment allowance : Cost of machine 1,30,904 Investment allowance @ 25 per cent 32,726 -----....
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....shall not be allowed under this section for the same or any other assessment year." In the history of the section as between the reliefs inter se between section 80HHA and section 80J, there is a further light on the matter if there still be any doubt as to the interpretation, which, according to us, is clearly in favour of the taxpayer. The present Chapter VIA was introduced by the Finance (No. 2) Act, 1967, when there was similar relief given under section 80H in respect of new industrial undertaking employing displaced persons. There was a relief under section 80-I in respect of the profits from priority industries, while section 80J provided relief for all new industrial undertakings. While reliefs under section 80H and section 80-I ....
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....t the final stage in the Finance (No. 2) Act, 1967 reads as under : "80J. Deduction in respect of profits and gains from newly established industrial undertakings or ships or hotel business in certain cases.--(1) Where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking or a ship or the business of a hotel, to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains (reduced by the aggregate of the deductions, if any, admissible to the assessee under section 80H and section 80-I) of so much of the amount thereof as does not exceed the a....