COMMISSIONER OF INCOME TAX Vs. COCHIN REFINERIES LIMITED

JUDGEMENT

(1.) IN this income-tax referred case, three questions have been referred to this court for its opinion :

(2.) THE assessee is a public limited company. THE assessment year concerned is 1968-69. THE original assessment of the assessee for the assessment year 1968-69 was completed on January 24, 1972. In the said assessment, the assessing authority did not consider the claim of the assessee for relief under Section 80J of the Act, as according to him, the assessment had resulted in a loss. But, it was specifically observed in the assessment order that the relief will be computed at the appropriate time in which Section 80J is to be actually allowed. Aggrieved by the assessment order, the assessee took up the matter in appeal before the Commissioner of Income-tax (Appeals), Ernakulam. While the appeal was pending before the Commissioner of Income-tax (Appeals), the assessing authority reopened the assessment of the assessee for the year 1968-69 under Section 147(b) of the Act for various reasons. THE assessing authority made the reassessment order on March 11, 1974. In the said reassessment order, the assessing authority considered the claim of the assessee for relief under Section 80J of the Act and the said relief was computed in a separate statement referred to as the last page of the annexure and described as item 3 thereof. THE computation made by the assessing authority in the said order is follows :

(3.) THE Commissioner of Income-tax (Appeals) disposed of the appeal against the reassessment by his order dated December 30, 1974. Pursuant to the appellate orders dated March 18, 1974, and December 30, 1974, the assessing authority passed an order dated January 18, 1975, giving effect to the directions contained in the said appellate orders. In the consequential order dated January 18, 1975, passed by the assessing authority, besides giving effect to the directions contained in the appellate orders, he also recomputed the relief available to the assessee under Section 80J of the Act. In that process, he reduced the net cost of the fixed assets from the original figure of Rs. 11,86,52,528. In addition, he also reduced the total value of the assets by a sum of Rs. 4,50,00,000 being a short-term dollar loan, in addition to other deductions from the capital of the company.