1996 (6) TMI 8

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....e Tribunal referred the following three questions for the opinion of this Court under s. 256(2) of the IT Act, 1961: "1. Whether, on the facts and in the circumstances of the case, and having regard to the provisions of the Expln. to r. 1 of the Second Schedule to the Companies (Profits) Surtax Act, 1964, the Tribunal was correct in holding that the dividends declared should not be deducted fro....

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....deration is whether having regard to the provisions of the Expln. to r. 1 of the Second Schedule to the Companies (Profits) Surtax Act, 1964 dividends declared should not be deducted from the general reserve in computing the capital for the purpose of levy of surtax. 3. In sofar as question No. 2 is concerned, it relates to whether the general reserve as on the first day of the previous year sh....

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....ion of the Supreme Court, we answer the above two questions in the negative and in favour of the Department. 4. In sofar as question No. 3 is concerned, it relates to whether the Tribunal was right in holding that the ITO was not correct in applying r. 4 of the Second Schedule to the Companies (Profits) Surtax Act, 1964, in respect of the deduction allowed under Chapter VI-A of the IT Act, 1961....