1974 (6) TMI 2

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....62, the assessee which is a public limited company claimed deduction of the following reserves as on March 31, 1972, for determining the capital base for the purpose of the Super Profits Tax Act, 1963 : Rs. 1. Taxation 12,15,000 2. Proposed dividends 3,18,026 3. Amount in credit of the depreciation reserve account in excess of the amount allowed for tax purposes 1,31,000 The Super P....

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....rt in Kesoram Industries & Cotton Mills Ltd. v. Commissioner of Wealth-tax and Commissioner of Income-tax v. Century Spinning & Manufacturing Co. Ltd. Regarding the excess depreciation the Tribunal held that as the accounts merely showed certain amounts having been adjusted towards depreciation, the same does not satisfy the requirement of rule 2(1) of Schedule 2 of the Super Profits Tax Act. At t....

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....ions of the statute and the decided cases on the point, we have held as regards the provision for taxation that the amount paid out by the company for discharging the actual tax liability cannot be taken to be an amount set apart or appropriated for a specific purpose or for future use of the company and it is only a provision made for discharging a specific liability, and hence, it cannot be trea....

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....rovision for dividend, it has been held in the said earlier judgment of this court in Nagammal Mills Ltd. v. Commissioner of Income-tax, that the amount set apart as a provision for dividend is for payment towards a specific liability and it cannot, therefore, be said to be a reserve for future use of the company. Following the said decision, we have to hold that a sum of Rs. 3, 18,026 set apart a....