1997 (1) TMI 32

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....elivered by K. A. THANIKKACHALAM J.---At the instance of the Department, the Tribunal referred the following questions, for the opinion of this court, for the assessment years 1971-72 to 1973-74, under section 256(1) of the Income-tax Act, 1961 : "1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the reserve for bad and doubtful d....

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.... point for consideration is whether the capital should be proportionately reduced in terms of rule 4 of the Second Schedule to the Companies (Profits) Surtax Act, 1964, consequent to the deductions allowed under Chapter VI-A of the Income-tax Act, 1961, for the assessment years 1971-72 and 1972-73. A similar question came up for consideration before the Supreme Court in Second ITO v. Stumpp Schuel....

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....cted from the general reserve while computing the capital for levy of surtax for the assessment years 1971-72 to 1973-74. A similar question came up for consideration before the Full Bench of this court in Southern Roadways Ltd. v. CIT [1981] 130 ITR 545, wherein this court held that when the general body approved the recommendation of the board of directors for distribution of the dividend at the....

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....86] 161 ITR 741, wherein it was held that for computing the capital for the purpose of the standard deduction in connection with the liability to tax under the Super Profits Tax Act, 1963, the same should be treated as capital ; so far as the bad and doubtful debts reserve for balance in Pakistan is concerned, it was contended that the reserve for balances in Pakistan should not be included in com....