1994 (2) TMI 17

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ed by R. K. ABICHANDANI J.---The Income-tax Appellate Tribunal, Ahmedabad Bench "B", has referred to us the following questions for our opinion under section 18 of the Companies (Profits) Surtax At, 1964, read with section 256(1) of the Income-tax Act, 1961: For the assessment years 1965-66 and 1966-67: " 1. Whether, on the facts and in the circumstances of the case, the amount of Rs. 1 c....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....computing the capital for determining the capital base under the rules of the said Act. The Income-tax Officer rejected the claims for both the years by observing that the impugned amount was a provision made of the liability relating to distribution of dividend and as such was not includible in computing the capital base. In appeal, the Appellate Assistant Commissioner, reversed the decision of t....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....reserve account. The material on record has also shown that the distribution of dividend from the profits has been effected from a dividend account and the dividend reserve account was not touched in any manner whatsoever. In our view, therefore, the Tribunal was right in upholding the decision of the Appellate Assistant Commissioner, holding that the amount of Rs. 1 crore standing to the credit o....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....unal held that the contentions of the Revenue were not tenable and these amounts were in the nature of reserve. It has come on record that these amounts were transferred to the general reserve account by the assessee and they were not utilised with a view to meet any known or anticipated liability. The character of both these accounts had remained unchanged even though they were styled as deferred....