Judgment :- VENKATASWAMI J. The Tribunal has referred the following question of law, at the instance of the Revenue, for the decision of this court "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee has the right to have the relief under section 80J of the Income-tax Act, 1961, recomputed by reckoning borrowed capital as part of the capital base for the assessment years 1970-71 and 1971-72 ?" The Tribunal, to answer the question in favour of the assessee, has observed as follows "This Tribunal, on further appeal by the assessee, had followed the decision of the Madras High Court in the case of CIT v. Bluemount Ceramics Ltd. to hold that the assessee was entitled to have the relief correctly computed in the year of set-off and adverted to a decision of the Allahabad High Court in Addl. CIT v. Sheetalaya, besides the decision of the Supreme Court in CIT v. Manmohan Das. This conclusion is not in dispute in the present reference application. The Tribunal further found that the claim of the assessee to have the borrowed capital as part of the capital base in respect of relief with reference to the assessment years 1972-73, 1973-74 and 1974-75 could no longer to be entertained in view of the retrospective amendment did not extend to the assessment years 1970-71 and 1971-72 and that the assessee, therefore, was entitled to the benefit of the view of the Madras High Court." It is now stated by Mr. J. Jayaraman, learned senior standing counsel for the Revenue, that the view of the court in the decision in Madras Industrial Linings Ltd. v. ITO, which has been followed by the Tribunal, was not accepted by the Supreme Court in Lohia Machines Ltd. v. Union of India. The Supreme Court has held that borrowed capital cannot be included as part of the capital baseMr. P. P. S. Janarthana Raja, learned counsel appearing for the assessee, accepts the above position In the above circumstances, we answer the question in the negative and in favour of the Revenue. No costs.