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TMI Blog1984 (11) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... d with section 256(1) of the Income-tax Act, 1961. The matter relates to surtax assessment year 1973-74. At the instance of the Commissioner of Income-tax, the following three questions of law are referred for the opinion of this court : " 1. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the amount of Rs. 9 lakhs transferred to the reserve f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts and in the circumstances of the case, the Tribunal was correct in holding that the amounts deducted under sections 80G, 80K and 80M of the Income-tax Act, 1961, in the income-tax assessment were not liable to be taken into account for the purpose of making proportionate reduction of capital under rule 4 of the Second Schedule to the Companies (Profits) Surtax Act, 1964 ?" Learned stand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al under the Companies (Profits) Surtax Act. This principle is clearly set out by the Supreme Court in Vazir Sultan Tobacco Co. Ltd. v. CIT [1981] 132 ITR 559. In the circumstances, the Tribunal was correct in holding that the sum of Rs. 2,37,085 constituted a reserve for purposes of computing the capital under the Surtax Act. We, accordingly, answer the second question in the affirmative, that is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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