1985 (6) TMI 22

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....dertaking from its profits and gains in the computation of its total income. In each of the said assessment years, there were no profits and gains. The assessee claimed further that the said 6% of its capital employed should be carried forward as deficiency under the said section for being set off against its profits and gains of the subsequent assessment years. Part of the capital of the assessee consisted of machinery purchased from a manufacturer in Japan on deferred payment basis. The assessee claimed that the quantum of the unpaid purchase price of the said machinery should be treated as money borrowed from an approved capital source for creation of capital assets in India and contended that the same should not be deducted from the ....

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....had been made to pay the price of the machinery in twenty half-yearly instalments with the approval of the Reserve Bank of India was produced before the Tribunal which took note of the same and held that the second condition prescribed under rule 19A(3)(b) have also been fulfilled. In the premises, the Tribunal held that the assessee's claim should be accepted and the computation of its capital for the purpose of the said section 80J and the said rule 19A of the Rules should be revised for all the years. The Revenue applied under section 256(1) of the Act calling upon the Tribunal to draw up a statement of the case and refer six questions of law to this court. The questions suggested included the following "(a) Whether, on the f....