9911796707
TMI Blog1988 (9) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... oner of Income-tax, Bombay City III, Bombay, made by the Income-tax Appellate Tribunal, Bombay Bench "B", under section 256(1) of the Income-tax Act, 1961. The question referred to us for our consideration to be found in paragraph 5 of the reference reads as under : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the Appellate Assistant Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31, 1967. Out of the profits for that year, two amounts were appropriated, namely, Rs. 4,10,000 to General Reserve No. 1 and Rs. 1,55,000 to General Reserve No. 2 (tax free). The Appellate Assistant Commissioner accepted the assessee's contention that on June 1, 1967, (sic) which is the first day of the previous year, the General Reserves stood augmented by the aggregate figure of Rs. 5,65,000. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to account in computing the capital of the company. As regards the sum of Rs. 1,55,000, apart from the Department's contentions in respect of the said amount which was identical with that for General Reserve No. 1 and which, therefore, had to be repaid, the Department came out with another contention, namely, that since General Reserve No. 2 consisted of profits eligible for relief under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion for refusing to follow the above decision of the Kerala High Court. Thus, even as regards General Reserve No. 2, the conclusion of the Tribunal that it has to be considered in computing the capital of the company will have to be accepted as correct. In the question referred to us at the instance of the Commissioner, we are only concerned with Rs. 1,55,000 taken to General Reserve No. 2 and n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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