Law:

Section:

Section 80J of the Income-tax Act, 1961, read with rule 19A of the Income-tax Rules, 1962 - Deductions - Profits and gains from new industrial undertakings, ships or hotels, etc. - Assessment year 1972-73 - Whether loans taken by assessee company from Industrial Finance Corporation of India and other banks were not includible in its capital computation base for purposes of section 80J and rule 19A - Held, yes FACTS The question arose for consideration was whether the loans taken by the assessee company from the Industrial Finance Corporation of India and other banks were includible in its capital computation base for purposes of section 80J(1), read with rule 19A. On reference : HELD In view of the Supreme Court's in Lohia Machines Ltd. v. Union of India [1985] 152 ITR 308., the loans in question taken by the assessee were not includible in its capital computation base for purposes of section 80J, read with rule 19A. Note : The decision is in favour of the revenue. CASE REFERRED TO Lohia Machines Ltd. v. Union of India [1985] 152 ITR 308 (SC). S.J. Mehta, I.M. Munim and A.N. Shah for the Applicant. G.S. Jetley, Mrs. Manjula Singh and K.C. Sidhwa for the Respondent. JUDGMENT S.P. Bharucha, J.- Three questions are posed at the instance of the assessee and they read thus: "1.Whether, on the facts and in the circumstances of the case, the sum of Rs. 14,79,000 being loan from Industrial Finance Corporation of India was includible in the capital computation base of the assessee for the accounting period relevant to the assessment year 1972-73 in view of section 80J(1) of the Income-tax Act, 1961/rule 19A of…

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