9911796707
TMI Blog1984 (7) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... no part of the above amount was claimed as reserve in the return filed, the assessee stated in its forwarding letter dt. 29th Sept., 1975, that out of the aforesaid amount of Rs. 45,20,987, the amount of Rs. 43,91,000 which represented the provision for the year ended 30th April, 1973, should be considered as a part of "other reserve". Alternatively, it was claimed that provision for taxation to the extent of Rs. 25,966 which represented the actual excess of provision over the tax liability and which was written back to P L Account subsequently should be considered as a part of other reserves. The assessee, it may be stated, also contended that it had received refunds in respect of income-tax and surtax proceedings for asst. yrs. 1965-66 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound, it was claimed that a further sum of Rs. 1120,103 representing refunds allowed to the assessee in appeals subsequent to 1st May, 1973 should also be treated as a part of other reserve. The CIT (A) has considered the assessee's claim with regard to the sum of Rs. 9,04,267 in paras 8 to 10 of his order. He has rejected the assessee's claim observing that (i) there is no provision in the books of the assessee or its Balance Sheet regarding this sum with reference to which the question whether there is any excess provision or not is to be decided and (ii) the sum of Rs. 9,04,267 represents the tax statutorily demanded and paid and it is only as a result of the appellate orders subsequently passed that the assessee became entitled to the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, the ld. Counsel for the assessee, before us that the CIT (A) has failed to appreciate the facts correctly. According to him, the Supreme Court's decision in the case of Addl. CIT vs. Gurjargravures P. Ltd. is not applicable in this case at all. In this context Sri Dastur stated that the point at issue both before the ITO and the CIT (A) has been as regards determination of the excess of provision over the assessee's liability for taxation. Mere fact that the amount of excess claimed before the ITO was smaller and bigger amount was claimed as excess before the CIT (A) does not justify the conclusion that the ground urged before the CIT (A) was all together new. On merits, the issue, according to Sri Dastur, is whether for the purpose of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the appellate authorities. According to Sri Dastur, if at the time of passing the assessment order or the appellate order the actual figures of tax liability are known to the concerned authorities, they are bound to take that liability into account for the purpose of determining the excess. In particular, Sri Dastur submitted that it will be most inequitable to give a preferential treatment to an assessee who has not paid the statutorily demanded tax and there is, therefore, a provision for the tax liability in the Balance Sheet over an assessee who has paid the statutorily demanded tax which has resulted in a provision for taxation in his books or Balance Sheet for that year. According to him, if the stand taken by the departmental au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the CIT (A) for which sufficient material was not available on record. 4. We have heard the parties and have carefully gone through the Supreme Court's decision in the case of Vazir Sultan Tobacco Co. Ltd. vs. CIT. It appears that in the said case, the dispute was as regards the provision for tax liability for the previous year over the provision for that year. In our opinion, the ratio decidendi of the decision is that there must, factually, be a provision in the balance sheet of the assessee-company on the relevant dates for the purpose of capital computation and that there is no warrant for considering the said provision for a particular year or years. The provision for taxation can be taken as a provision for the overall tax liabil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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