Y.R.Meena, J. - (1.) On an application under Section 256(1) of the Income-tax Act, 1961, the Tribunal has referred the following questions for our opinion, set out at pages 2 and 3 of the statement of case : "(1) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is justified in law in confirming the order of the Commissioner of Income-tax (Appeals) in including the amount of Rs. 10,76,283 representing the value of incomplete jobs for the computation of capital for the purpose of calculating the relief under Section 80] of the Income-tax Act ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the reassessment of the assessment year 1970-71, should be made also on the facts and realities which was not prevalent during the previous year relevant to the assessment year 1970-71? (3) Whether, on the facts and in the circumstances of the case, the Tribunal is justified in holding that the term 'agreement' as envisaged in Clause (b) of Rule 19A(3) also included an agreement which provides the facility of extending on a later date, the limitation period of repayment of the loan, on the basis of a mutual agreement between the debtors and the creditors, though the said extension was not made during the previous year relevant to the assessment year under consideration ? (4) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in not considering that the agreement of the loan should not provide for repayment of the loan within a period of less than seven years in order to have the credit under Section 80J read with Rule 19A of the Income-tax Rules ?"
(2.) The relevant assessment year is 1970-71 for which the relevant accounting period ended on March 31, 1970. The assessee company has set up a cement plant at Vasantnagar, Andhra Pradesh, and the said cement plant commenced commercial production during the accounting year relevant to the assessment year 1969-70. The original assessment was completed under Section 143(3) of the Act on March 20, 1971. The assessment was reopened under Section 147 after serving notice under Section 148 on the ground that in the original assessment, the benefit of Section 80J has been allowed on the incomplete job to the tune of Rs. 10,76,283 treating the amount as capital employed. Therefore, the dispute is whether the benefit or relief under Section 80J of the Act can be allowed on the value of incomplete job.
(3.) Learned counsel for the assessee, Mr. J.P. Khaitan, submits that the apex court has considered this aspect in the case of CIT v. Alcock Ashdown and Co. Ltd. [1997] 224 ITR 353. Their Lordships after considering whether Section 80J relief can be given on a workshop still under construction held that the amount representing the value of plant and machinery under construction could be taken into account in determining the capital employed.;