The deduction under Section 80-J of the Income Tax Act, 1961 is to be allowed in full for the year in which the capital is employed, irrespective of the period of actual production in the new industrial undertaking.

( 1 ) IN respect of the assessment year 1970-71, the Income Tax Appellate Tribunal has referred the following questions for the opinion of this Court, at the instance of the Revenue:

1. Whether on the facts and in the circumstances of the case, the expend iture of Rs. 9,068. 00 incurred by the assessee on the foreign tour of Dr. Bharat Ram to attend the meetings of the International Chamber of Commerce was deductible in computing its business income for the assessment year 1970-71?

2 Whether, on the facts and in the circumstances of the case,the Tribunal was legally right in holding that the expenditure of Rs. 65,746 / - incurred by the assessee for running the D. C. M. Football Tournament was an admissible deduction for arriving at its profits from business?

3. Whetheron the factsand in thecircumstancesofthecase, was the Tribunal right in confirming the Appellate Assistant Commissioner s order in which relief under Section 80-J was ordered for die full accounting period even though the industrial undertaking M /s. Shri Ram Fertilizers worked only for a period of 5 months?

( 2 ) THE first question is to be answered in favour of the assessee in view of the decision of this Court in the case of die assessee itself, relating to the assessment year 1969-70, reported asdelhi Cloth and Generalmills Co. Ltd. v. Commissionerofincotite Tax, (1986) 158 ITR 64. The question is accordingly answered in the affirmative i. e. in favour of the assessee and against the Revenue.

( 3 ) SIMILARLY, in view of the decision of this Court in the case of the assessee itself in respect of the assessment year 1965-66, reported as Delhi Cloth and Generalmills Co. Ltd. v. Commissioner of Income Tax, (1992) 198 ITR 500, question No. 2 is also required tobeansweredinfavouroftheassessee. Thequestionisaccordingly answered in die affirmative i. e. in favour of the assessee and against the Revenue.

( 4 ) AS regards question No. 3, the assessee Company claimed relief under Section 80-J of the Income Tax Act, 1961 (for short the Act) at 6% of the capital employed for die full assessment year 1970-71, for die period ended on 30th June, 1969, aldiough it had commenced production on 1st February, 1969. The Income Tax Officer, however, computed dw relief under the said section on pro-rata basis for the actual period of five monthsinwhich die industrial undertakinghadworkedduringtheyear. Theappellate Assistant Commissioner and die Tribunal did not agree with die view taken by the Income Taxofficerand dius,allowed thereliefasclaimed bytheassessee forthe whole year. On these facts, the aforenoted question has been referred for the opinion of this Court. The short question for consideration is as to what meaning is to be ascribed to die phrase "6% perannum"asappearinginsection80-Jofdwact. lnod-ierwords,whether the relief under die said section has to be worked out on pro-rata basis for die period of actual working of die undertaking or should it be allowed for the full year in which the capital was employed, though the actual production in die new industrial undertaking was only for a part of the year. A similar question came up for consideration before the Madras High Court in Commissioner of Income Tax, Tamil Nadu-l v. Simpson and Co. , (1980) 122 ITR 283; die Madhya Pradesh High Court in Commissioner of Income Tax, M. P. v. Sanghi Bewerages (Pvt.) Ltd. , (1982) 134 ITR 623 and die Kamataka High Court in Commis- sioner of Income Tax, Kamataka-ll v. Mysore Petrochemical Ltd^ (1984) 145 ITR 416 and all the three Courts, while observing that the provisions of Section 80-J of the Act, which were intended to encourage the setting up of new industrial enterprises have to be construed liberally, opined dial the deduction under the said section has to be allowed in full without reducing die same in proportion to the part of die year during which the undertaking was not in productive operation. Besides, it has also been brought to our notice by learned Counsel for the