1994 (11) TMI 72

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.... T. L. VISWANATHA IYER J.--The question of which the Revenue seeks reference is related to the point whether the amount represented by dividends proposed to be declared is liable to be deducted in the computation of the capital employed for purposes of section 80J(1A) of the Income-tax Act, 1961, as a debt owed. The Commissioner (Appeals) held that the amount was not a debt owed on the relevant....

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.... as dividend and, therefore, there was no debt owed by the company to the shareholders on that date. The proposed dividend was not thus deductible in computing the net wealth of the assessee-company. The ratio of this decision of the Supreme Court was applied to the case by the Tribunal who affirmed the decision of the Commissioner (Appeals). We are at one with the Tribunal on this point and we....

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....ndustrial undertaking are computed under sections 28 to 43A. Clause (III) provides for the deductions to be made from the value of the assets determined under clause (II). One of the items to be deducted is "debts owed" as on the first day of the computation period. The value of the assets and the deductions (including debts owed) are thus crystallised with reference to the first day of the comput....