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TMI Blog2008 (3) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... 3-2008 - K. RAVIRAJA PANDIAN and MRS. CHITRA VENKATARAMAN JJ. Mrs. Pushya Sitaraman for the Commissioner. Venkatanarayanan for the assessee. JUDGMENT The judgment of the court was delivered by K. Raviraja Pandian J.- The assessment year involved is 1980-81. The following question of law has been referred to this court for our opinion by the Income-tax Appellate Tribunal at the instance of the Revenue : "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in cancelling the order of the Commissioner of Income-tax passed under section 16 of the Companies (Profits) Surtax Act holding that rule 2 of the Second Schedule to the Act cannot be applied on the facts of this case?" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rule 2 of the Second Schedule pertaining to the reduction in the capital base would also not apply. Reliance was placed by the assessee on the Madras High Court decision in the case of Additional CIT v. Madras Motor and General Insurance Co. Ltd. [1979] 117 ITR 354. The Commissioner, however, noted that the Supreme Court had granted special leave to the Department to appeal against this decision and hence the decision has not become final. He, therefore, directed the Assessing Officer to redo calculations by reducing from the capital the net cost of the shares owned by the assessee and thereby reduce the standard deduction, and in accordance with law. 3. The Tribunal considered the arguments advanced by the assessee that the Madras ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of this court in the cases of CIT v. United India Fire and General Insurance Co. [1990] 182 ITR 355 and CIT v. Sri Rama Vilas Service Ltd. [1995] 215 ITR 625, approving the stand taken by the Tribunal. In the said decision, it was held as follows (headnote) : "A perusal of the provisions of the Companies (Profits) Surtax Act, 1964, shows that it is only the chargeable profits that are brought under the statute as is evident from section 4 of the Act. Chargeable profits are the profits adjusted in accordance with rule 1 of the First schedule to the Act. From the chargeable profits, the statutory deductions have to be made and it is only the excess of the chargeable pro-fits over the statutory deductions that are brought to tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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