Contingency reserve treatment under surtax law was held to form part of capital, leaving no substantial question for appeal.

For capital computation under the Companies (Profits) Surtax Act, an appropriation that is in substance a contingency reserve or similar reserve is treated as a reserve and included in capital. The Calcutta High Court noted that this position had already been settled by earlier decisions following the Supreme Court, so no further substantial question of law arose. On that basis, the request for a certificate to appeal was rejected.

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Issues: Whether the special appropriation for plant expansion and contingencies constituted reserves for the purpose of computing capital under the Second Schedule to the Companies (Profits) Surtax Act, 1964, and whether the matter required further consideration for grant of a certificate to appeal.

Analysis: The issue was held to be covered by earlier decisions of the same court, which had followed the Supreme Court's pronouncement on the nature of reserves for surtax computation. The court treated the special appropriation towards contingencies as falling within the concept of reserve and noted that the legal position had already been settled by binding precedent. On that basis, no substantial question of law was found to justify a certificate for appeal.

Conclusion: The claimed appropriation was treated as a reserve for capital computation, and the prayer for certificate to appeal failed.

Final Conclusion: The legal position on inclusion of such appropriations in capital for surtax purposes was regarded as settled, and the application was rejected.

Ratio Decidendi: For computation of capital under the Companies (Profits) Surtax Act, an appropriation that is in substance a contingency reserve or similar reserve is includible as a reserve, and no certificate for appeal lies where the point is already concluded by binding precedent.

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