The Commissioner of Income Tax, Delhi-V New Delhi vs M/s. Ravindra Tubes Ltd., Hissar

Gokal Chand Mital, J.—Herein, the question involved is whether the asessee is entitled to deduction u/s 80J of the Income Tax Act, 1951 (for short ''the Act''), on the borrowed capital. The Income Tax Appellate Tribunal, Delhi, had allowed deduction on the borrowed capital also in view of Century Enka Ltd. Vs. Income Tax Officer, "D" Ward and Others, and Madras Industrial Linings Ltd. Vs. Income Tax Officer and Others, but in a later decision the Supreme Court overruled both the decisions in Lohia Machines Ltd. and Another Vs. Union of India (UOI) and Others, and concluded that as Assessee is not entitled to relief of deduction u/s 80J of the Act on the borrowed capital. Here, we have been called upon to give opinion on the following question referred to this Court by the Tribunal:

Whether on the facts and in the circumstances of the case the Tribunal is correct in law in holding that the Assessee is entitled to relief u/s 80-J on the borrowed Capital?

In view of the Supreme Court Decision in Lohia Machines'' case (supra), we answer the question in favour of the Revenue, that is, in the negative and hold that the Tribunal was not correct in law in giving relief to the Assessee u/s 80-J of the Act on the borrowed capital. No costs.

Sd/- S.S. Sodhi, J.