2005 (3) TMI 24

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....ribunal, Delhi, has referred the following question of law under section 256(2) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), for opinion to this court: "Whether the Tribunal is justified in view of the provisions of rule 1A of the Second Schedule of the Surtax Act in holding that in order to arrive at the capital base provision of taxation to be taken is not the provision....

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....ation was only Rs. 6,00,000 as against the actual liability of Rs. 6,80,346. He was of the opinion that for arriving at the capital base the excess amount of tax of Rs. 80,346 levied must be deducted from the capital base of Rs. 20,02,299. He, thus deducted a sum of Rs. 80,346 being the excess provision for income-tax from the capital base and the balance of capital base of Rs. 19,21,953 was arriv....

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....ng to that conclusion, the Tribunal has relied upon the language of rules 1 and 1A of the Second Schedule of the 1964 Act. We have heard Sri Shamboo Chopra, learned standing counsel for the Revenue, and Sri R.R. Agrawal, learned counsel appearing for the respondent-assessee. Learned standing counsel submitted that as the tax finally determined was Rs. 6,80,346, the provision made by the resp....

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....revious year relevant to the assessment year of its paid up share capital, reserves, etc. Rule 1A provides for deduction of current liabilities and provisions as on the first day of the previous year relevant to the assessment year. Thus, the emphasis in the aforesaid two rules is on the first day of the previous year relevant to the assessment year and whatever reserves, paid up capital, current ....