S.K. Chander, Accountant Member - (1.) THE solitary ground taken up in this appeal reads as under ; That the learned Commissioner of Income-tax (Appeals) erred in law and on the facts and in the circumstances of the case in allowing the deduction Under Section 80J of the Income-tax Act, 1961 at 6 per cent for a period of 12 months as against the deduction claimed for a period of 15 months forming: the previous year of the appellant firm.
(2.) On the above ground, we have heard the parties. The learned counsel for the assessee submitted before us that we should interpret the relevant provisions of law liberally so as to advance the benefit available to the assessee to cover in a particular assessment year, period of more than 12 months, if that is the previous year of the assessee. For this, he supported his submissions with a reference and reliance on the judgment of the Madras High Court in the case of CIT v. Simpson & Co. [1980] 122 ITR 283. In the case of the assessee, the previous year for the assessment year 1979-80 has been accepted by the revenue as consisting of 15 months. He, therefore, submitted that the assessee should be given deduction Under Section 80J for a period of 15 months taking 12 months as the base for which 6 per cent deduction per annum is provided in the Act. The Id. counsel for the assessee submitted that the assessee has already been allowed deduction Under Section 80J by the authorities below for the period of 12 months, because they interpreted the 6 per cent per annum as a period not exceeding the period of 12 months. Relying upon the judgment of the Gujarat High Court in the case of CIT v. Sarabhai Sons Ltd. [1983] 143 ITR 473, he submitted that the inverse ratio of this judgment supports his submission, insofar as the Courts have held that where the industrial undertaking has worked for less than 12 months, the deduction should be allowed for the whole year and not proportionately reduced. The Gujarat High Court, in this case, it was submitted by the learned counsel for the assessee, having observed that where the industrial undertaking worked for less than one year, the assessee would be entitled to only proportionate relief held that the other High Courts being of the opinion that full rebate should be allowed that Court also followed those judgments in order to maintain a uniform policy in income-tax matters. Thus, according to the learned counsel for the assessee, the authorities below were in error in not allowing the deduction as claimed. Their orders be set aside with the directions to the ITO to allow the deduction Under Section 80J as claimed by the assessee.
(3.) THE learned DR submitted that there has been so far uniformity in the judicial opinion about the deduction to be given Under Section 80J to an industrial undertaking fulfilling specified conditions under the statute. Since the Courts have held that the benefit of deduction Under Section 80 J of the Act is to be allowed for 5 assessment years as provided in the statute in the process 6 per cent deduction has been allowed even in the assessment years, where the industrial undertaking worked for less than 12 months. He, however, submitted that by no stretch of imagination can lead to a justifiable argument that if the industrial undertaking adopts a previous year, which is more than the period of 12 months, then the deduction Under Section 80J provided at 6 per cent per annum should also be proportionately enhanced. He submitted that for this proposition no authority is available and the claim of the assessee is preposterous and untenable. He supported the authorities below fully and submitted that the appeal of the assessee be dismissed.;