Capital base computation under the Surtax Act: no referable question of law arose on reserve treatment.

Treatment of machinery replacement reserve, contingency reserve and dividend equalisation reserve for computing capital base under the Surtax Act was examined as a reference issue. The Court noted that machinery replacement reserve and dividend equalisation reserve were already covered by prior decisions, so no useful purpose would be served by re-agitating them. The contingency reserve was treated as being in the nature of a general reserve, and on that basis no referable question of law arose from that issue either. As a result, the first question was treated as merely academic and the petitions were held not maintainable on the issues raised.

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Issues: Whether any referable question of law arose on the treatment of machinery replacement reserve, contingency reserve, and dividend equalisation reserve for computation of capital base under the Surtax Act.

Analysis: The machinery replacement reserve and dividend equalisation reserve were already covered by prior decisions of the Court, and no useful purpose would be served by referring them again. The contingency reserve was treated as being in the nature of a general reserve, and on that basis the Court found that no referable question of law arose from the second question. In consequence, the first question was regarded as merely academic.

Conclusion: No question of law arose for reference, and the petitions were not maintainable on the issues raised.

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