COMMISSIONER OF INCOME TAX Vs. KESORAM INDUSTRIES LTD

JUDGEMENT

(1.) On an application under Section 256(1) of the Income-tax Act, 1961, the Tribunal has referred the following questions for our opinion, set out at pages 2 and 3 of the statement of case :

(2.) The relevant assessment year is 1970-71 for which the relevant accounting period ended on March 31, 1970. The assessee company has set up a cement plant at Vasantnagar, Andhra Pradesh, and the said cement plant commenced commercial production during the accounting year relevant to the assessment year 1969-70. The original assessment was completed under Section 143(3) of the Act on March 20, 1971. The assessment was reopened under Section 147 after serving notice under Section 148 on the ground that in the original assessment, the benefit of Section 80J has been allowed on the incomplete job to the tune of Rs. 10,76,283 treating the amount as capital employed. Therefore, the dispute is whether the benefit or relief under Section 80J of the Act can be allowed on the value of incomplete job.

(3.) Learned counsel for the assessee, Mr. J.P. Khaitan, submits that the apex court has considered this aspect in the case of CIT v. Alcock Ashdown and Co. Ltd. [1997] 224 ITR 353. Their Lordships after considering whether Section 80J relief can be given on a workshop still under construction held that the amount representing the value of plant and machinery under construction could be taken into account in determining the capital employed.