MADRAS INDUSTRIAL LININGS LIMITED Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THE question raised by the assessee in this writ petition relates to the validity of Rule 19A(3) of the Income-tax Rules, 1962. THE assessment of the petitioner for the year 1972-73 was made by applying Rule 19A(3) of the Rules.

(2.) SHORTLY stated the point raised is that Rule 19A(3) has taken away the benefit conferred by Section 80J of the Act. We shall extract Section 80J as well as Rule 19A(2) and (3):

(3.) AT page 4 of the affidavit filed by the petitioner in support of the petition is extracted a part of the assessment order from which it is seen that a sum of Rs. 35,02,795 had been deducted from the sum of Rs. 61,17,104. The sum of Rs. 61,17,104 represents " capital employed " by the assessee. The amount of Rs. 35,02,795 had been deducted because that amount represented the borrowed capital.