COMMISSIONER OF INCOME TAX Vs. PREMIER BREWERIES LIMITED

JUDGEMENT

(1.) AT the instance of the Revenue, the Income-tax Appellate Tribunal has referred the following question of law for the decision of this court :

(2.) THE respondent is an assessee to income-tax. We are concerned with the assessment year 1974-75 for which the accounting period ended on December 31, 1973. THE assessee claimed deduction of Rs. 2,97,341 under Section 80J of the Income-tax Act. THE Income-tax Officer held that the production commenced only on June 2, 1973, during the middle of the year, and deduction under Section 80J of the Act could be granted only proportionatee to the period for which the industrial undertaking had worked. Accordingly, the Income-tax Officer determined the net unabsorbed depreciation to be carried forward as Rs. 21,86,406, the development rebate to be carried forward as Rs. 13,27,208 and the deduction under Section 80J of the Act was determined at Rs. 1,72,622. In appeal, the Appellate Assistant Commissioner held that the Income-tax Officer was not justified in computing the deduction allowable under Section 80J proportionate to the period for which the industrial undertaking had worked. THE plea of the assessee was accepted. In the further appeal filed by the Revenue before the Appellate Tribunal, the Appellate Tribunal, following the decision of the Madras High Court in CIT v. Simpson and Co. [1980] 122 ITR 283, held that the decision of the Appellate Assistant Commissioner is valid and justified in law. THE plea of the Revenue that only 6 per cent. of the capital employed should be allowed proportionate to the period for which the industrial undertaking had worked during the relevant previous year was negatived. It is thereafter at the instance of the Revenue that the question of law formulated hereinabove has been referred for the decision of this court.

(3.) A copy of this judgment, under the seal of the court and the signature of the Registrar, shall be forwarded to the Income-tax Appellate Tribunal, Cochin Bench.