Section 80G deductions excluded from surtax capital-employment relief under rule 4, following Supreme Court precedent.

Deductions allowed under section 80G of the Income-tax Act, 1961 were held not to be sums not includible in total income for deduction under rule 4 of the Second Schedule to the Companies (Profits) Surtax Act, 1964 while computing capital employed. The court followed an earlier Supreme Court ruling that had already decided the same question against the Revenue and noted that the Supreme Court had also approved earlier High Court decisions, including decisions of this court, on the point. The issue was therefore answered in favour of the assessee and against the Revenue.

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Issues: Whether deductions allowed under section 80G of the Income-tax Act, 1961 could be treated as sums not includible in total income for the purpose of deduction under rule 4 of the Second Schedule to the Companies (Profits) Surtax Act, 1964 while computing capital employed.

Analysis: The question was held to be covered by an earlier decision of the Supreme Court which had already answered the same issue against the Revenue. That decision was treated as squarely applicable, and the court followed it. The court also noted that the Supreme Court had approved earlier High Court decisions, including decisions of this court on the same point.

Conclusion: The issue was answered against the Revenue and in favour of the assessee.

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