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TMI Blog1984 (2) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... years under reference are 1964-65 and 1966-67, and the relevant previous years are Samvat years 2019 and 2021, respectively. Out of its profits for the accounting year, which is S.Y. 2018 (ended on October 28, 1962), the assessee had set apart sum of Rs. 13 lakhs as provision for taxation. The assessee had also in addition set apart for that year a sum of Rs. 5,36,000 as " Reserve for tax conting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finding has also been upheld by the Income-tax Appellate Tribunal. Questions Nos. 1 and 2 referred to us relate to these findings. In the assessee's balance-sheet as on October 24, 1965, that is to say, the last day of S.Y. 2021, a sum of Rs. 9,16,285 stood credited to the capital reserve account of the assessee, being realisations on account of the sale of import entitlements under the Export ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the capital of the company under the Second Schedule to the Companies (Profits) Surtax Act, 1964, for the assessment year 1964-65 ? (2) Whether, on the facts and in the circumstances of the case, the sum of Rs. 4,30,164 in the reserve for tax contingency account as on November 4, 1964, was eligible for inclusion in the computation of its capital under the Second Schedule to the Companies ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty relating to taxation. The amounts in question were additional amounts shown as a reserve for tax contingency. No part of these amounts has been utilised for payment of any tax, and in a subsequent assessment year, these amounts have been transferred to General Reserve These amounts are, therefore, a reserve and not a provision. Secondly, as held by the Supreme Court in the case of Vazir Sultan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In either case, the result would be that these amounts will have to be included in the computation of capital of the company under the Second Schedule to the Companies (Profits) Surtax Act, 1964. Questions Nos. 1 and 2 are, therefore, answered in the affirmative, that is to say, in favour of the assessee and against the Department. There will be no order as to costs. - - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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