JUDGMENT

GOSWAMI, J. :—An important question of law as to the interpretation of Section 80K of the Income-tax Act, 1961 (briefly the Act) is raised in these four appeals by special leave.

2. M/s. Coromandel Fertilizers Limited (First Respondent) is a registered company incorporated on October 16, 1961, under the Companies Act and the 2nd Respondent is one of its shareholders holding two hundred equity shares in the paid-up capital of the company out of the total number of 95,82,010 equity shares issued by it. The company was engaged in manufacture of fertilizers at its factory at Vishakhapatnam and it commenced production in December 1967.

3. There is no dispute that the company as such fulfilled the appropriate conditions laid down under sub-section (4) of Section 80 J of the Act to qualify for deduction in respect of profits upto an extent of six per cent per annum on the capital employed in respect of profit for the purpose of computation of tax.

4. The company was assessed to income-tax as an industrial under-taking for the first time for the assessment year 1969-70. The orders of assessment were passed on 23-11-1972 and 4-1-1973. The said orders disclosed a sum of Rs. 11,10,176/-