Gratuity provision excluded from capital computation for surtax purposes, following binding precedent on the same issue.

For surtax computation under Rule 1 of Schedule II of the Companies (Profits) Surtax Act, 1964, a provision for gratuity was held not to form part of the assessee-company's capital. The Court treated the issue as governed by its earlier decision on the same point and applied that precedent to exclude the gratuity provision from the capital base. The question was answered against the assessee and in favour of the Revenue.

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Issues: Whether provision for gratuity was includible in the computation of the assessee-company's capital under Rule 1 of Schedule II of the Companies (Profits) Surtax Act, 1964 for surtax purposes.

Analysis: The issue was treated as covered by an earlier decision of the Court on the same point. Applying that precedent, the provision for gratuity was not to be included in the capital computation for surtax.

Conclusion: The question was answered in the negative and against the assessee, in favour of the Revenue.

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