9911796707
TMI Blog1977 (2) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... x contingency reserve and pension reserve are includible in the computation of capital under rule 1 of Sch. II of the Companies (Profits) Surtax Act, 1964." The assessee is a non-resident foreign company incorporated in U.K. and engaged in the manufacture of tea from the estates owned by it in India. It filed a return under the above Act for the assessment year 1964-65 admitting a net chargeable profit of Rs. 21,144. In the computation of capital under r. 1 of Sch. II of the said Act, the assessee treated (1) replanting, building and machinery reserve, (2) tax contingency reserve and (3) pension reserve as part of its capital. The respective amounts are as follows : (1) Replanting, building and machinery reserve pound 60,000 (2) Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he beginning of the creation of this reserve in 1953, no amount has been debited to this account and every year additional sums have been added and ultimately for the year ended June, 1967, the entire amount of Rs. 8 lakhs (pound 60,000) was transferred to the general reserve account." In dealing with the contingency reserve, the AAC has pointed out : "I find from the balance-sheet that in respect of taxation there are : (a) tax contingency reserve, pound 25,000, (b) future taxation, pound 64,700 and (c) current taxation, pound 15,968. As explained by the appellant the quantified provisions created for the current taxation is at (c) above whereas the amount coming under (b) is in respect of the income of the year with a provision for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on." With reference to this very assessee there was an earlier reference in T.C. No. 98 of 1971 [since reported in CIT v. Craigmore Land and Produce Co. Ltd. [1977] 110 ITR 730 (Mad)]. That reference was concerned with the order of the the Tribunal in S.P.T.A. Nos. 16 and 17 of 1968-69 dated March 12, 1970, which the Tribunal followed, in the present case. In that reference, the following question was one of the two questions referred for the opinion of this court : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that replanting, building and machinery reserve of Rs. 8,00,000 was a reserve includible in the computation of capital under r. 1 of the Second Schedule to the Super Profits ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
