1978 (7) TMI 46

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..... 64. The question referred to us by the Income-tax Appellate Tribunal is as under : " Whether, on the facts and in the circumstances of the case, the reserve for the purpose of computing the capital for purposes of deduction under the Second Schedule should be Rs. 36,11,279 or Rs. 80 lakhs ? " The answer to this question holds no difficulty. The assessee is a public limited company carrying on .....

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..... ounsel for the assessee at whose instance this reference has been made, contends that though the balance-sheet shows the reduced figure, the actual books of the company show a general reserve of Rs. 80 lakhs and, therefore, that should be accepted as the capital for the purpose of the Surtax Act. This contention cannot be accepted. The balance-sheet for the year ending September 19, 1967, shows th .....

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..... of Rs. 36,11,279. The simple failure of the assessee to further deduct this amount from the general reserve of Rs. 80 lakhs in the book is only an omission on its part. The accounts themselves would show the actual balance after deducting the loss clearly shown in the profit and loss account at Rs. 36,11,279. Therefore, the Tribunal was right in holding that the general reserve was not Rs. 80 lakh .....

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