COMMISSIONER OF INCOME TAX Vs. LODHA ENTERPRISES

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, has referred the following question of law to this court for adjudication :

(2.) THE assessee, M/s. Lodha Enterprises, Jodhpur, is a duly registered partnership firm dealing in the business of manufacture and sale of iron bars (round and flat). THE assessment year is 1977-78. In the return filed by the assessee for the aforesaid year, it claimed a sum of Rs. 51,733 as deduction under Section 80J of the Income-tax Act, 1961 (hereinafter to be referred to as "the Act"). THE Income-tax Officer disallowed the deduction of the aforesaid amount. THE assessee went up in appeal. In the appeal, the Commissioner (Appeals), by his order dated March 7, 1979, directed the Income-tax Officer to allow relief under Section 80J. In doing so, he followed the view taken by the Calcutta High Court in Century Enka Ltd. v. ITO [1977] 107 ITR 909 and Madras Industrial Linings Ltd. v. ITO [1977] 110 ITR 256 (Mad). THE Revenue went in appeal before the Income-tax Appellate Tribunal. THE appeal was dismissed and the view taken by the Income-tax Commissioner (Appeals) was upheld. THE Commissioner of Income-tax thereafter moved an application to the Tribunal to make the reference. THE Tribunal thereafter has made this reference.

(3.) THE reference is answered in the negative, that is, against the assesses and in favour of the Revenue. Parties will bear their own costs of this court.