9911796707
TMI Blog1989 (3) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... or increasing (by revaluation or otherwise) any book asset of the assessee-company within the meaning of Explanation 1 of rule 2 of the Second Schedule to the Companies (Profits) Surtax Act, 1964 ? 2. If the answer to question No. 1 is in the negative, then whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the Income-tax Officer did not have jurisdiction to pass the rectification order for excluding the above sum of Rs. 4,00,000 (rupees four lakhs) in the computation of capital for the purpose of assessment under the Companies (Profits) Surtax Act ? For the assessment year 1967-68 : 1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal are that the assessee-company had issued 4,000 shares of Rs. 100 each to James Mackie and Sons Ltd. The consideration for the issue of the shares found by the Tribunal was that the assessee, by an agreement with James Mackie and Sons Ltd., had been permitted to use Mackie's goodwill in the textile machinery market in India during the period of three years from the date of allotment of shares. The contention before the Tribunal was that the assessee took the benefit of Mackie's goodwill in the textile machinery market in India and had also obtained permission to use Mackie's machine designs, to describe machines of such designs as being of the Mackie type, and generally to identify itself with the reputation and products of Mac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its and gains of a company is not includible in its total income as computed under the Income-tax Act, its capital shall be the sum ascertained in accordance with rules 1, 2 and 3, diminished by an amount which bears to that sum the same proportion as the amount of the aforesaid income, profits and gains bears to the total amount of its income, profits and gains." The argument made on behalf of the assessee cannot be brushed aside. Rule 4 of the Second Schedule clearly speaks of profits and gains of a company which are not includible in its total income. The contention made on behalf of the assessee was that the profit under section 80E can only be calculated if the income was included in the gross total income of, the assessee. This is a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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