M/S LOHIA MACHINES LIMITED AND ANR. versus UNION OF INDIA AND ORS.
Rule 19A, to the extent it excludes borrowed capital and fixes the first day of the computation period for relief under s.80J, is invalid and unconstitutional. The amendment incorporating Rule 19A provisions in 1980 is valid prospectively but invalid and unconstitutional as regards its retrospective operation from 1st April 1972.
- Parties
- Petitioner: M/S Lohia Machines Limited; Respondent: Union of India
- Jurisdiction
- India
- Judgment Date
- 25 January 1985
- Procedural Posture
- Writ Petition / Final Judgment
- Outcome
- petitions dismissed
- Legal Topics
- Retrospective Amendment, Validity of Rule Making, Computation of Capital Employed, Excessive Delegation, Tax Exemption for New Industries
Case Brief
Summary, issues, holding and outcome
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Parties
M/S Lohia Machines Limited
Petitioner
Union of India
Respondent
Procedural Posture
Writ Petition / Final Judgment
Legal Issues
- 1 Whether 'capital employed' includes long term borrowings under s.80J of Income Tax Act
- 2 Whether Central Board of Revenue is competent to prescribe computation by rules
- 3 Whether computation of 'capital employed' as on 'the first day of the computation period' is ultra vires s.80J(1)
Ratio Decidendi
Rule 19A, to the extent it excludes borrowed capital and fixes the first day of the computation period for relief under s.80J, is invalid and unconstitutional. The amendment incorporating Rule 19A provisions in 1980 is valid prospectively but invalid and unconstitutional as regards its retrospective operation from 1st April 1972.
Court Disposition
petitions dismissed
Orders
- Both parties to bear their own costs
Full Case Text
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