Commissioner of Income Tax vs Jahanganj Cold Storage

In this case, Sri RK Gulati was counsel for the assessee. He was elevated to the Bench and thereafter retired. On 10-12-2002, notice was issued to the assessee to engage another counsel. The office note dated 23-6-2003 states that neither acknowledgement nor undelivered cover has returned back after service. Hence, in view of the Explanation-II to Chapter VIII, rule 12 of the High Court Rules, service is deemed sufficient.

This is a reference u/s 256(1) of the Income Tax Act, in which the following question has been referred to us for our opinion :

"Whether on the facts and in the circumstances of the case, the Tribunal was justified in holding that while computing the capital of the undertaking with reference to which the relief u/s 80J should be computed the Income Tax Officer should not have deducted the borrowed capital from the value of the gross assets as worked out in terms of sub-rule (2) of the rule 19A of the Income Tax Rules, 1962 ?

The facts of the case are covered by the decision of the Supreme Court in Lohia Machines Ltd. and Another Vs. Union of India (UOI) and Others, .

Following the said decision, the reference is answered in the negative, i.e., in favour of the department and against the assessee.