9911796707
TMI Blog2005 (3) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... Mentioning the word "provision" itself connotes that it is a liability which is to be incurred in future. By no stretch of imagination can making a provision of a future liability towards tax be equated with the actual amount of tax assessed. Thus, the Tribunal was justified in taking the provision of Rs. 6,00,000 towards tax liability made on the first day of the previous year relevant to the assessment year - we answer the question referred to us in the affirmative, i.e., in favour of the assessee and against the Revenue - - - - - Dated:- 23-3-2005 - Judge(s) : R. K. AGRAWAL., PRAKASH KRISHNA. JUDGMENT The judgment of the court was delivered by R.K. Agrawal J. - The Income-tax Appellate Tribunal, Delhi, has referred the followi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the balance of capital base of Rs. 19,21,953 was arrived at and the chargeable profits assessable to surtax were calculated thereon. Feeling aggrieved by the determination of chargeable profits, the respondent preferred an appeal before the Commissioner of Income-tax (Appeals) who found that the calculation of Rs. 80,346 was wrong and that it should be Rs. 2,66,257. On that basis, he further reduced the capital base by Rs. 1,85,911 after serving a notice of enhancement on the respondent-assessee. Feeling aggrieved by the order passed by the Commissioner of Income-tax (Appeals), the respondent preferred further appeal before the Tribunal. The Tribunal has held that for the purposes of arriving at the capital base, the provision, as it stoo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear relevant to the assessment year. Thus, the emphasis in the aforesaid two rules is on the first day of the previous year relevant to the assessment year and whatever reserves, paid up capital, current liabilities and provisions are made on the first day of the previous year relevant to the assessment year are to be taken into consideration. If the interpretation as put forward by learned standing counsel is accepted, then it would amount to re-writing the clear language of rules 1 and 1A of the Second Schedule of the 1964 Act, which is not permissible under law. It is also not the case of the Revenue that the provision of Rs. 6,00,000 made by the respondent assessee on the first day of the previous year relevant to the assessment year in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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