1989 (9) TMI 59

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....HA J. -This reference, at the instance of the Revenue, raises a single question, which reads thus : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in upholding the Appellate Assistant Commissioner's decision that the capital for the purpose of surtax assessment cannot be proportionately taken in accordance with the period of the previous year even though the....

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.... "Section 2. (8) 'statutory deduction' means an amount equal to ten per cent. of the capital of the Company as computed in accordance with the provisions of the Second Schedule, or an amount of two hundred thousand rupees, whichever is greater: Provided that where the previous year is longer or shorter than period of twelve months, the aforesaid amount of ten per cent. or, as the case may be,....

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....n being more than 10% of the proportionate capital base 2,00,000 Proportionate for 9 months net chargeable profits 1,50,000 1,50,000 1,53,575 ---------------- Surtax payable: 5% of the capital base, i.e., Rs. 6,00,000 at Rs. 30,000 at 25% 7,500 Balance of Rs. 1,23,575 at 30% 37,073 -------------- 44,573" ----------------- The assessee went up in appeal to the Ap....

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....er cent., which has to be increased or decreased depending upon whether the assessee's previous year is of more than 12 months or less than 12 months. The capital base has to be computed without any reference to the proviso. Mr. Jetley, learned counsel for the Revenue, relied upon the judgment of the Madras High Court in CIT v. Madras Auto Service (P.) Ltd. [1985] 156 ITR 828. The previous year....