TaxTMI 
TaxTMI 
1993 (7) TMI 59
X X X X Extracts X X X X
X X X X Extracts X X X X
....law in holding that the deposit made by the (applicant) company under the Companies Deposits(Surcharge on Income-tax) Scheme, 1976, is not payment of surcharge on income-tax payable by the company, so that the said amount of deposit cannot be aggregated with the income-tax payable and deducted in arriving at the chargeable profits ?" The year of assessment is 1977-78, corresponding to the accounting year ending on June 30, 1976. The question involved relates to the quantum of chargeable profits of the petitioner which is a company incorporated under the Companies Act. The charge of surtax under section 4 of the Surtax Act is on the "chargeable profits" of the previous year. "Chargeable profits" is defined in sub-section (5) of section....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... company, having regard to the decision of the Supreme Court in CIT v. K. Srinivasan [1972] 83 ITR 346. The Finance Act, 1976 (Act No. 66 of 1976), made some special provisions in relation to payment of surcharge on income-tax for the assessment year 1977-78 with corresponding provisions for payment of advance tax for that year. The second proviso to sub-section (6) of section 2 of the Act relating to payment of advance tax provided that an assesseecompany may, in lieu of payment of the surcharge on income-tax specified in the Act, make a deposit under the scheme framed under sub-section (8) before the last instalment of advance tax was due, and when it did so the amount of surcharge on income-tax payable by it shall be nil where the dep....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ance tax, namely, December 15, 1976. This was in accord with sub-section (6) of section 2 referred to earlier. The Finance (No. 2) Act of 1977 (Act 29 of 1977), which governs the assessment for the year 1977-78, in its turn, made a provision similar to sub-section (8) of section 2 of the Finance Act of 1976. The proviso to section 2(1) thereof laid down that, where an assessee, being a company, had made, during the financial year commencing on April 1, 1976, any deposit with the Industrial Development Bank of India established under the Industrial Development Bank of India Act, 1964 (18 of 1964), under the Companies Deposits (Surcharge on Income-tax) Scheme, 1976, then, the surcharge on income-tax payable by the company shall be nil in c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to treat the said amount as part of the income-tax referred to in rule 2 of the First Schedule to the Surtax Act. The other member concurred with the decision on different approach. She held that, as per section 2 of the Finance (No. 2) Act of 1977, no surcharge was payable by the assessee in this case, as the surcharge payable was nil in cases where the amount deposited with the Industrial Development Bank of India was equal to or in excess of the amount of surcharge payable by it. The effect of both the orders was that the assessee did not get the benefit of reduction of the amount of deposit made with the Industrial Development Bank of India in the computation of its chargeable profits of the year. The matter was debated before us at ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n in its entirety is of no avail to the assessee to earn the benefit of deduction of the amount of surcharge in the computation of the chargeable profits under rule 2(i) of the First Schedule to the Surtax Act. We have extracted the said provision and it provides, inter alia, that the balance total income arrived at after the exclusions mentioned in rule 1 shall be reduced by the amount of income-tax payable by the company in respect of its total income under the provisions of the Income-tax Act, 1961, after making allowance for any relief, rebate or deduction in respect of the income-tax to which the company may be entitled under the provisions of the said Act or the annual Finance Act. The effect of the latter part of this rule is that th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... this form, based on the terms of clause (i) of rule 2 has not been adverted to or considered either by the Tribunal or by the other authorities. But we are of the opinion that the matter is concluded by the provisions of the clause and that it is unnecessary to consider the matter from the angle in which it has been presented before the Tribunal. The question referred by the Tribunal does not, however, truly reflect the real nature of the dispute between the parties. The question is really whether the assessee is entitled to deduct the amount of surcharge pay able under the provisions of the Finance (No. 2) Act of 1977 from the total income for the purpose of computation of the chargeable profits. Since the question referred does not re....