1985 (2) TMI 13

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....the provisions contained in section 80J of the Income-tax Act, 1961, read with rule 19A of the Incometax Rules, 1962, prohibiting inclusion of borrowed capital employed by the assessee while computing the capital employed in the business for the purposes of 80J relief are debatable in nature ? " (2) If the answer to the above question is in the negative, whether the Appellate Tribunal was justified in law in confirming the order of the Commissioner of Income-tax (Appeals) quashing the order of the Income-tax Officer under section 154 of the Income-tax Act, 1961, rectifying the quantum of relief allowable under section 80J of the Income-tax Act, 1961, for the assessment year in question ?" For the assessment year 1972-73, accounting pe....

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....filed an application for reference under section 256(1) of the Act to the Tribunal for making a reference. The application has been rejected by the Tribunal saying that the findings are of fact. It is true that the question was debatable at the time when the impugned order was passed by the Commissioner and the Tribunal. But after the decision of the Tribunal, this court in CIT v. Anand Bahri Steel & Wire Products [1982] 133 ITR 365 and CIT v. K N Oil Industries [1982] 134 ITR 651 took the view that sub-rule (3) of rule 19A of the Income-tax Rules, 1962, which requires the deduction of borrowed moneys in determining the capital employed by the assessee for the purpose of calculating the tax relief under section 80J of the Income-tax Act,....