9911796707
TMI Blog1993 (2) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... e filed a return of chargeable profits under the Companies (Profit) Sur-tax Act, 1964 (hereinafter referred to as the Act) on 30-9-1983 declaring chargeable profits at Rs. 13,80,158 with sur-tax liability of Rs. 4,31,108. While computing the capital as on 1-1-1982 as per rules I and II of the Second Schedule of the Act, at Rs. 1,61,27,355, the assessee gave the following working :--- Rs. " Paid-up capital 30,00,000 General Reserve 93,09,997 Subsidy 29,472 I/A Reserve 28,98,948 D/R Reserve 2,56,062 ---------------------- 1,54,94,479 Add : Capital increased during the year as per Rule 3 of the Second Schedule : Rs. Capital as on 1-1-1982 30,00,000 Capital as on 21-12-1982 60,00,000 Capital increase on 15-10-1982 ----------------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hash Aggarwal, the learned counsel for the assessee submitted that the impugned order was rather sketchy and laconic and was not a speaking order at all. It was submitted that while the HP High Court in the case of Mohan Meakin Breweries Ltd. and the Bombay High Court in the case of CIT v. Geoffrey Manners & Co. Ltd. [1978] 112 ITR 334 support the case of the assessee, the two decisions of Bombay and Calcutta High Courts referred to above, support the case of the Revenue. It was submitted that in a situation like this where two views were equally possible, the view in favour of the assessee must prevail. 6. The learned Counsel for the assessee also took up a new plea before us which was not taken before the Revenue authorities. It was sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee also filed relevant extracts from the assessee's balance-sheet as on 31-12-1982. 7. The learned D.R., on the other hand, submitted that the two judgments relied on by the learned Counsel for the assessee were under the Super Profit Tax Act whose provisions were materially different from those of the Act. It was submitted that the two decisions available under the Act were those of the Bombay and Calcutta High Courts and these were in favour of the Revenue. In that view of the matter, it was submitted that there was no other equally possible view which should prompt the Revenue to lean in favour of the assessee. As regards the new plea taken by the assessee's Counsel, the learned D.R. submitted that as per the balance-sheet of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of previous year, a part of the amount standing to the credit of the general reserve is capitalised by issue of fully paid-up bonus shares, it cannot be said that the capital of the company computed in accordance with rule I of the Second Schedule is increased by any amount of such issue of bonus shares. According to the High Court, what happens in such a case is that a part of the sum standing to the credit of one of the sub-items to be included in the computation of capital is during the previous year transferred to another item to be included in the computation of capital under rule 1. Therefore, according to the High Court, when bonus shares are issued as fully paid-up shares by capitalization of a part of the amount standing to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demonstrated by the Bombay High Court, were materially different from those of the Act. There is, therefore, no question of adopting a view favourable to the assessee because no such view in the form of a High Court judgment has been brought to our notice. 11. As regards the new plea, the argument of the learned Counsel for the assessee, though attractive, is without any substance. As rightly pointed out by the learned D.R. the entries made in the books of account of the assessee have their importance and relevance and cannot be wished away. As per the entries recorded in the balance-sheet, general reserve as per such balance-sheet came to Rs. 93,09,997. Out of this amount, a sum of Rs. 30 lacs was reduced being utilised for issue of bonu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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