1995 (3) TMI 44

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....rs 1972-73 and 1974-75 were valid in law ? " The assessee is a company which had claimed relief under section 80J of the Act in respect of an industrial undertaking for the assessment years 1972-73 and 1974-75. The relief claimed under section 80J of the Act was initially refused by the Income-tax Officer, but it was allowed in appeal by the Tribunal for the assessment year 1972-73 and by the Appellate Assistant Commissioner for the assessment years 1970-71 and 1974-75. While giving effect to these appellate orders, the Income-tax Officer followed the decision of the Madras High Court in Madras Industrial Linings Ltd. v. ITO [1977] 110 ITR 256 and treated the borrowed capital as part of the capital base in arriving at the extent of the r....

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.... Department wanted was to keep the matter alive so that the final order passed by the Department would be in accordance with the judgment of the Supreme Court since special leave has been granted against the judgment of the Madras High Court in Madras Industrial Linings Ltd. v. ITO [1977] 110 ITR 256 (Mad). According to learned standing counsel, had the Income-tax Officer made a protective assessment as per the practice prevalent then, the present contingency would not have arisen, because, after the judgment of the Supreme Court is known, the order would have been passed in accordance with the order passed by the Supreme Court. It was further pointed out that, in the present case, the decision of the Madras High Court in Madras Industrial ....

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....n proceedings could not be sustained and accordingly set aside the order of the Commissioner of Income-tax. On a reference, this court held that, "in view of the order of the Tribunal for the earlier years 1970-71 and 1971-72 having been subsequently set aside by the High Court in CIT v. Smt. Lakshmi Narayan [1981] 132 ITR 355, the notice proposing to revise the order of the Income-tax Officer issued by the Commissioner of Income-tax was valid. Though the said decision of the High Court was in fact subsequent to the order of the Tribunal setting aside the order of the Commissioner of Income-tax, the said decision should be taken to be declaratory and should be taken to be the law on the date when the notice to revise the assessment was i....