https://www.taxtmi.com/caselaws?id=40193 Rule 3 of the Second Schedule to the Companies (Profits) Surtax Act, 1964 applies only when capital computed under rule 1 is increased during the previous year through paid-up share capital, debentures, or borrowings. Capitalisation of reserves by issuing fully paid bonus shares does not introduce fresh capital and does not, by itself, increase the capital base existing on the first day of the previous year. The Court also noted that rule 2 of the Second Schedule to the Super Profits Tax Act, 1963 could not control the interpretation of rule 3 under the Surtax Act. On that basis, no proportionate increase in capital was available for the bonus issue. en-us Thu, 02 May 1996 00:00:00 +0530 Wed, 09 Jul 2014 14:51:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=40193 Rule 3 of the Second Schedule to the Companies (Profits) Surtax Act, 1964 applies only when capital computed under rule 1 is increased during the previous year through paid-up share capital, debentures, or borrowings. Capitalisation of reserves by issuing fully paid bonus shares does not introduce fresh capital and does not, by itself, increase the capital base existing on the first day of the previous year. The Court also noted that rule 2 of the Second Schedule to the Super Profits Tax Act, 1963 could not control the interpretation of rule 3 under the Surtax Act. On that basis, no proportionate increase in capital was available for the bonus issue. Case-Laws Income Tax Thu, 02 May 1996 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=40193