JUDGMENT The appellant-assessee is a company carrying on business of steel rolling mills and production of mild steel coils. The assessment year under reference is 1963-64. The relevant previous year ended on 31-3-1963. There is no dispute that the income of the assessee derived from newly established industrial undertakings was entitled to relief under Section 84. of the Income-tax Act as it stood at that time. The relief under Section 84 was that income tax was not to be paid by an assessee on profit or gains derived from any industrial undertaking as did not exceed six per cent of the capital employed in such undertaking. The capital employed has to be computed in accordance with Rule 19 of the Income Tax Rules. The Tribunal found that the capital had been computed by taking the average between the opening and closing value of the assets. The increase or decrease in the profits had automatically been adjusted in the computation, as the profits and losses were not set apart in a separate fund but were reflected in the assets. The adjustment having already taken place, the application of sub-rule (5) was not required and the Tribunal pointed out that if this adjustment was made there would be double addition or subtraction with regard to the profits or losses. In the view of the Tribunal, the sub-rule would come in for application only where the average between the opening and closing capital had not been taken. 2. At the instance of the assessee, the following question of law was referred to the High Court: "Whether, on the facts and in the circumstances of the case and on a proper interpretation of Rule 19 (5) of the Income-tax Rules, 1962, the assessee was eligible for any adjustment in computing the relief under Section 84 of the Income-tax Act, 1961 in respect of the profits earned during the year." The High Court, however, did not examine the question in detail, but merely followed an earlier decision of the Court in the case of Anantpur Textiles Limited v. Commr. of In come Tax, West Bengal III, Calcutta (judgment delivered on 31 st July 1974). Following that decision, the High Court answered the question in the negative and in favour of the Revenue. A certificate of fitness for appeal to the Supreme Court was granted by the High Court. 3. of In come Tax, West Bengal III, Calcutta (judgment delivered on 31 st July 1974). Following that decision, the High Court answered the question in the negative and in favour of the Revenue. A certificate of fitness for appeal to the Supreme Court was granted by the High Court. 3. A Division Bench of the Gujarat High Court examined the scope of Rule 19 in the case of Commissioner of Income-tax v. Elecon Engineering Co. Ltd., 104 ITR 510. That judgment was affirmed by this Court in the case of Commissioner of Income Tax. Gujarat v. Elecon Engineering Company Limited, 167 ITR 639. 4. Since the High Court has not examined the facts of the case and the method of accounting by the assessee and also the scope of Rule 19 and Rule 19 (5), but had merely followed its earlier judgment which is not reported and has not been made available to us, we are of the view that the controversy raised in this appeal should be examined and decided afresh by the High Court. 5. The order under appeal is set aside. The High Court will examine the scope and ambit of Rule 19 and to what extent sub-rule (5) thereof was applicable to the facts of the present case. The appeal is accordingly disposed of and the matter is remitted to the High Court. No costs. Order accordingly. For Citation: 1995 AIR SCW 3071