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Section 80J of the Income-tax Act, 1961 - Deductions - Profit and gains from newly industrial undertakings, ships, hotels, etc. - Assessment years 1979-80 and 1980-81 - Whether cost of work-in-progress is to be treated as part of capital employed for purpose of calculating relief under section 80J - Held, yes CASES REFERRED TO CIT v. Alcock Ashdown & Co. Ltd. [1979] 119 ITR 164 (Bom.) [Para 3], CIT v. Alcock Ashdown & Co. Ltd. [1997] 224 ITR 353/30 Taxman 521 (SC) [Para 4] and Addl. CIT v. Isthmian India Maritime (P.) Ltd. [1978] 113 ITR 570 (Mad.) [Para 5]. R.V. Desai and P.S. Jetly for the Applicant. J.D. Mistry for the Respondent. JUDGMENT J.P. Devadhar, J. - In this reference relating to assessment years 1979-80 and 1980-81, Tribunal at the instance of the Revenue has referred the following questions for opinion under section 256(1) of the Income-tax Act, 1961 : Common question for both the assessment years 1979-80 and 1980-81 "1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the value of the work-in-progress has to be treated as part of the capital employed for the purpose of relief under section 80J of Income-tax Act, 1961 ?" For assessment year 1979-80 "2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the deduction under section 80-O of the Act should be calculated on the gross fees received by the assessee-company ?" 2. The facts relevant for the purpose herein are as follows : In the assessment year in question the assessee claimed relief under section 80J of the Income-tax Act, 1961, by reference to the capital employed in the new business undertaking inclusive of the amount of the value of work-in-progress. The Assessing Officer rejected the contention of the assessee and computed the deduction under section 80J by excluding the value of the work-in-process in the capital employed. 3. Being aggrieved by the aforesaid order, the assessee filed an appeal before CIT(A) who accepted the claim of the assessee. The Tribunal following the judgment of this Court in the case of CIT v. Alcock Ashdown & Co. Ltd. [1979] 119…

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