1996 (7) TMI 102

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....ed by ASHOK BHAN J. --- This is a petition filed by the Commissioner of Income-tax, Haryana, Rohtak, under section 256(2) of the Income-tax Act, 1961 (hereinafter referred to as the Act), for the assessment year 1978-79 directing the Income-tax Appellate Tribunal, Delhi Bench " B ", Delhi (hereinafter referred to as the Tribunal), to refer the following question of law for the opinion of this c....

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.... cent. on the capital of Rs. 34,89,312 employed in the rim manufacturing unit against which the assessee-company had borrowed the following amounts : 1. Investment by cycle unit of Atlas Cycle India Ltd. 27,72,758 2. Loan from I.E.C. 10,00,000 ----------------------- Total 37,72,758 ----------------------- The Income-tax Officer disallowed the deduction claimed by the assessee....

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....nit while computing the capital and allowing deduction under section 80J. The assessee being aggrieved filed an appeal before the Commissioner of Income-tax (Appeals) who allowed the appeal of the assessee and held that the loan taken by the rim manufacturing unit from cycle unit was to be included in the capital computation for allowing deduction under section 80J. The Revenue did not accept the ....

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....annot be treated as borrowed monies and debts owed by the assessee. The said amount of Rs. 27,72,758 would thus go into the capital computation base for working out the deduction under section 80J of the Act." The Revenue did not accept the view of the Tribunal and filed an application under section 256(1) of the Act for making a reference of the question of law reproduced in the earlier part o....