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Judgment
S.P. Bharucha, J.—Two questions arise for consideration in this reference at the instance of the Revenue. They read thus :
"(i) Whether any liabilities should be deducted in the computation of the capital employed in the new industrial undertaking for the purpose of relief u/s 84 of the Income Tax Act, 1961 ?
(ii) If the answer to question No. (i) above is in the affirmative, whether only those liabilities which are due and payable on the relevant date should be deducted or all the liabilities which are owed but which are not due and payable on the relevant date should be deducted ?"
Counsel are agreed that the first question must be answered in the affirmative and in favour of the Revenue in view of the judgment of the Supreme Court in Lohia Machines Ltd. and Another Vs. Union of India (UOI) and Others, .
The first question is so answered.
The answer to the first question being in the affirmative, the second question has to be considered. And it is agreed that the issue is concluded by the judgment of this court in Commissioner of Income Tax, Bombay City-VI Vs. National Organic Chemical Industries Ltd., . Having regard to this judgment, the question is answered thus : Only those liabilities which were due and payable on the relevant date can be deducted.
No order as to costs.