TaxTMI 
TaxTMI 
1979 (4) TMI 88
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....he loans taken and it should be treated as capital employed in the business. The AAC, followed the ruling of the Calcutta High Court in M/s Century Enka Ltd vs. ITO(1) accepted the assessee's claim and held that the loans amounting to Rs. 2,97,487 should be treated as capital employed in the business. Aggrieved by this order of the AAC the Revenue has come on appeal before us. 3. We heard the learned departmental representative and the learned counsel for the assessee. 4. The learned departmental representative's main grievance was that in view of the Supreme Court decision in Addl. CIT, Gujarat vs. Gurjargravures P. Ltd.(2), the AAC ought not have entertained the assessee's claim for not excluding the borrowed money in computing the capi....
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....se, the question referred to the High Court should have been answered in the negative." From the above passage it is clear that the Supreme Court was not dealing with a case where there was evidence on record to support the claim made by the assessee or with a case where a claim was made but there was no evidence or insufficient evidence. On the other hand, it was made clear that in that case the assessee did not make any claim before the ITO and there was also no material on record to support such a claim. In the instant case, there was enough material to support the assessee's claim even before the ITO. In fact, in the annexure to the assessment order in working out the 80J relief, the ITO has referred to the sum of Rs. 2,97,487 as secur....