1973 (8) TMI 13

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.... and 1963-64. In the course of that year the Income-tax Officer, while working out the capital employed for the purpose of section 84, added Rs. 1,15,807, being half of the profit of the relevant accounting year. Similar addition was made for the assessment year 1963-64 when an amount of Rs. 1,93,628, being half the share of the profit, was added for purposes of ascertaining the average amount of the capital. The capital thus worked out at Rs. 5,97,313 and Rs. 7,81,916 for the assessment years 1962-63 and 1963-64, respectively. It appears that subsequently the Income-tax Officer was of the view that the addition of these amounts in the computation of the capital was incorrect because, in his opinion, the average amount of capital had alread....

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.... the Income-tax Rules, 1962, that for purposes of giving benefit to the assessee under section 84 as it then stood at the relevant time, the average amount of the capital has to be computed and that computation is to be made according to clause (1). Now, clause (5) of the said rule 19, which is relevant for the purposes of determination of the question, provides as under: " (5) For the purpose of ascertaining the average amount of capital employed in a business during any computation period, the profits or losses made in that period shall, except so far as the contrary is shown, be deemed-- (a) to have accrued, at an even rate throughout the said period; and (b) to have resulted, as they accrued, in a corresponding increase or decr....