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Judgment
U.T. Shah, J.—These two cross-references, one by the assessee and the other by the Revenue, are being disposed of together for the sake of convenience.
u/s 256(1) of the Income Tax Act, 1961, the Income Tax Appellate Tribunal has referred the following questions :
At the instance of the assessee :
"1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in not admitting the additional ground filed by it in its letter dated March 29, 1977, that section 80J tax relief should be worked out from the assessment year 1968-69 computing the capital employed for the purpose of section 80J(1) at the gross value of the assets without deducting the loans and liabilities and that the relief thus worked out for the past assessment years should be adjusted against the total income for the assessment year 1972-73 ?
Whether, on the facts and in the circumstances of the case, the Tribunal was right in not entertaining the assessee''s additional ground raised in its letter dated August 31, 1976, that in computing the capital employed for the purpose of section 80J ''current liabilities of Rs. 1,58,49.208'' should also not be deducted ?
Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the initial depreciation also should be deducted to arrive at the written down value of the assets for inclusion in the capital for purpose of section 80J read with rule 19A of the Income Tax Rules, 1962 ?"
At the instance of the Revenue :
"1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the know-how provided in the form of books, manual, etc. received by the assessee from a foreign company under a collaboration agreement would constitute ''plant'' on which depreciation is admissible ?
Whether, on the facts and in the circumstances of the case, the Tribunal was right in allowing the assessee''s claim for depreciation on the fans installed in the worker''s housing colony ?
Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the sum of Rs. 25,96,600 representing the cost of construction work-in-progress and also advance against capital purchases were includible as assets in the capital computation under rule 19A for determining the deduction u/s 80J ?
Whether, on the facts and in the circumstances of the case, the Tribunal was right in interpreting the expression ''capital employed in the industrial undertaking'' used in section 80J of the Income Tax Act, 1961, to mean the total value of the assets of the new industrial undertaking without deducing therefrom the borrowed moneys and debts due by the assessee ?"
As regards the first two questions referred at the instance of the assessee, learned counsel for the assessee was fair enough to state that though the decision of this High Court in the case of Ahmedabad Electricity Co. Ltd. And Godavari Sugar Mills Ltd. Vs. Commissioner of Income Tax, is in favour of the assessee inasmuch as the assessee can raise an additional ground even before the Tribunal, the issues raised in these questions, however, have become academic in view of the decision of the Supreme Court in Lohia Machines Ltd. and Another Vs. Union of India (UOI) and Others, . Under such circumstances, he states that these questions may be returned unanswered as they have become academic.
In view of the aforesaid position we decline to answer these two questions and return them unanswered.
As regards the issue raised in question No. 3, the same is covered by the decision of this court in the case of Commissioner of Income Tax, Bombay City-I Vs. Zenith Steel Pipes Ltd. (Now Zenith Steel Pipes and Industries Ltd.), in favour of the Revenue.
Following the aforesaid decision we answer the question in the negative that is in favour of the Revenue and against the assessee.
As regards the issue raised in the first question referred to us at the instance of the Revenue, the same is covered by the decision of the Supreme Court in the case of Scientific Engineering House (P) Ltd. Vs. Commissioner of Income Tax, Andhra Pradesh, in favour of the assessee.
Following the aforesaid decision, we answer the question in the affirmative, that is, in favour of the assessee and against the Revenue.
As regards the issue raised in question No. 2 we find from the order of the Tribunal that the Tribunal has held fans as "plant". In this view of the matter, the assessee would be entitled to depreciation thereon. Under the circumstances we answer this question also in the affirmative that is in favour of the assessee and against the Revenue.
As regards the issue raised in question No. 3 the same is covered by the decision of this court in Commissioner of Income Tax, Bombay City-I Vs. Alcock Ashdown and Co. Ltd., in favour of the assessee.
Following the aforesaid decision this question is also answered in the affirmative that is in favour of the assessee and against the Revenue.
12.As regards the last question referred to us the instance of the Revenue, the same is covered by the decision of the Supreme Court in Lohia Machines Ltd. and Another Vs. Union of India (UOI) and Others, in favour of the Revenue.
Following the aforesaid decision, we answer this question in the affirmative that is in favour of the Revenue and against the assessee.
No order as to costs.