1980 (6) TMI 20

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....mpany within the meaning f rule 19A(3) ? " For the assessment year 1971-72, the assessee claimed relief under . 80J amounting to Rs. 1,32,267. This was allowed by the ITO. It had been computed as follows :                                                          Rs.      " Written down value of depreciable assets        on 1-4-1970 including land          &nb....

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....nbsp;                          Rs.                 Deduct : Secured loans                                 13,04,009                          Unsecured loans                 &....

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....;                                      ---------                                                        22,04,48                              &n....

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....en deducted while computing the capital under r. 19A of the I.T. Rules for the purpose of allowing relief under s. 80J of the I.T. Act, 1961. He, accordingly, issued a notice under s. 263 of the Act in response to which, the assessee stated that the proposed action was not justified and the actual allotment of shares could be done only after April 6, 1970, since there was some delay in the grant of approval by the Reserve Bank of India and could not be done earlier and that all such moneys, whether called as deposits or share capital, should be included in the determination of the capital employed for purposes of relief under s. 80J, and the amount cannot be construed as money borrowed or as a debt. However, the Commissioner did not accept ....

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....sioner and restored that of the ITO. At the instance of the Commissioner, the above reference has been made. In our opinion, on the admitted facts, the answer to the question must be in the affirmative. Rule 19A prescribes the mode in which the capital employed in an industrial undertaking should be computed for the purposes of giving relief under s. 80J. Several kinds of assets are mentioned and as to how the value thereof should be taken and in item V of sub-r. (2) of the said rule, it is mentioned that in the case of assets being cash in hand, the amount thereof. Therefore, whatever amount is held by the industrial undertaking as cash in hand or in bank is an item to be taken into account in computing the capital employed. Rule 19A....