1. These are assessee's appeals against the common order of the Commissioner (Appeals), Calicut, dated 19-2-1983 and they relate to the assessment years 1975-76 and 1976-77.
2. The assessee is a banking company. The assessment years involved are 1975-76 and 1976-77, for which the previous years are the calendar years of 1974 and 1975, respectively. Certain points involved in these appeals are common and, hence, they can be taken up together and disposed of by a common order.
3. Ground Nos. 1 and 2 for the assessment years 1975-76 and 1976-77 are common. The points involved in these grounds are firstly whether the provision for gratuity, as on the opening day of the accounting years, is not to be taken as part of the capital under the Second Schedule to the Companies (Profits) Surtax Act, 1964. It is the case of the assessee that the provision for gratuity is not based on any actuarial valuation, but an ad hoc sum is appropriated without resorting to any scientific basis. In such an event, following the Bombay High Court decision in CIT v. Blundell Eomite Paints Ltd. [1983] 140 ITR 51 and the Kerala High Court decision in CIT v. Periakaramalai Tea & Produce Co. Ltd. [1973] 92 ITR 65, the whole provision should be treated as part of the capital under the Second Schedule, for purpose of determining the standard deduction. The provision for gratuity as on 1-1-1974 was stated to be Rs. 2,92,512 ; whereas it stood at Rs. 7,91,487 as on 1-1-1975. The learned counsel for the assessee submitted before us that the assessee adopted a rough and ready method of considering half-a-month's salary for each completed month's service of an employee, in each accounting year, for computing the provision for gratuity. He submitted that this principle itself is defective. By this method it is assumed that all employees are to retire at the end of the year. It is obvious that this method would be ignoring estimation of the liability on actuarial basis. He submitted that an ad hoc provision for gratuity not with reference to actuarial method, is not a provision for any known or ascertained liability. He submitted that at least two-thirds of the provision would be found to be in excess of the actual liability computed on actuarial basis. Even then, the learned counsel argued that, according to the Supreme Court decision in Vazir Sultan Tobacco Co. Ltd. v. CIT [1981] 132 ITR 559 the excess provision which is found to be in excess of the sum required to meet the estimated liability (discounted present value on a scientific basis) will have to be regarded as a reserve. The learned departmental representative, on the other hand, contended that the Kerala High Court decision in Periakaramalai Tea & Produce Co. Ltd.'s case (supra) is much prior to the corning into force of the Kerala Industrial Employees' Payment of Gratuity Act, 1970. He submitted that firstly an ordinance was promulgated in Kerala on 10-12-1969 and it was replaced by the Kerala Industrial Employees' Payment of Gratuity Act. The Act was passed on 18-2-1970 with effect from 10-12-1969. Under the said Act gratuity became a statutory liability and it is stated so in CIT v.High Land Produce Co. Ltd. [1976] 102 ITR 803 (Ker.). The learned departmental representative also submitted that in Hyderabad Asbestos Cement Products Ltd. v. CIT [1976] 105 ITR 822 (AP) (FB) the previous decision of the Kerala High Court in Periakaramalai Tea & Produce Co.
Ltd.'s case (supra) was dissented from. Therefore, in effect the argument of the learned departmental representative was that Periakaramalai Tea & Produce Co. Ltd.'s case (supra) was not governing the field any longer and, hence, it need not be followed and, consequently, after the coming into force of the Payment of Gratuity Act, 1970, payment of gratuity became a statutory liability and a provision made to meet the said liability would, under no circumstance, be considered as a reserve for purposes of the Second Schedule to the Companies (Profits) Surtax Act. Therefore, the argument of the assessee should fail. In Periakaramalai Tea & Produce Co. Ltd.'s case (supra) the Kerala High Court held that a fund created for payment of retirement gratuity to the employees of a company is not for any commitment which has already arisen or payment of which has fallen due, but is only a provision in regard to gratuity which may arise in future. The fund so created is 'other reserve' within the meaning of Rule 1 of the Second Schedule and should be taken into account in computing the capital of the company for the purposes of the Act. In Vazir Sultan Tobacco Co. Ltd. v. CIT [1974] 96 ITR 248 (AP) it was held that the amount set apart for gratuity was set apart in respect of a liability known on the date of the balance sheet and, therefore, it is only a provision and not a reserve. However, in the said case, the Kerala High Court decision in Periakaramalai Tea & Produce Co. Ltd.'s case (supra) was not considered. In Hyderabad Asbestos Cement Products Ltd.'s case (supra), it is held that a 'provision' does not acquire the character of a 'reserve' merely because the assessee has been carrying forward the balance in the provision account from year to year after meeting the liability, unless some person possessing requisite authority designated it as such or indicated the manner of the disposal or the distinction of the balance amount concerned. Admittedly, as no such designation had been made in the case which had arisen before the Andhra Pradesh High Court, the Full Bench held that the provision cannot be treated as a reserve for purpose of computation of chargeable profits under the Super Profits Tax Act, 1963. It is no doubt true that the Full Bench specifically dissented from the view of the Kerala High Court expressed in Periakaramalai Tea & Produce Co. Ltd.'s case (supra). But now as against the judgment of the Andhra Pradesh High Court in Vazir Sultan Tobacco Co. Ltd.'s case (supra) the matter was carried in appeal by the assessee and it was partly reversed by the Supreme Court in Vazir Sultan Tobacco Co. Ltd.'s case (supra). In that case the Hon'ble Supreme Court had specifically considered the question whether there was any scope to consider an 'appropriation to gratuity' as a 'reserve'. Firstly, their Lordships considered the distinction between a 'provision' and a 'reserve' with reference to Part HI of the Sixth Schedule to the Companies Act, 1956 and held that on a plain reading of clause 7(1)(a) and (b) and clause 7(2) of Part III of Sixth Schedule and observed that it will be clear that though the term 'provision' is defined positively by specifying what it means, the definition of 'reserve' is negative in form and not exhaustive in the sense that it only specifies certain amounts which are not to be included in the term 'reserve'. So, they have deduced the following principle, viz. : ... But it is clear beyond doubt that if any retention or appropriation of a sum is not a provision, that is to say, if it is not designated to meet depreciation, renewals or diminution in value of assets or any known liability the same is not necessarily a reserve. ...(p. 570) Their Lordships approved the principle that any excess provision which was found to be in excess of the amount reasonably necessary for the purpose of taxation, the excess should be treated as a reserve and not as a provision. They specifically held the following also at the same page : ... There could be no dispute about the principle that if provision for a known or existing liability is made in excess of the amount that would be reasonably necessary for the purpose the excess shall have to be treated as a reserve and, therefore, would be includible in the capital computation but no such case was made out by the assessee-company at any stage of the assessment proceedings either before the taxing authorities or even before the Tribunal or the High Court and in the absence of any such plea having been raised at any stage of the proceedings it will not be proper for this Court to allow the assessee-company to raise such a plea, which will need investigation into facts, for the first time in its appeal before this Court. ...(p. 573) The above principle they have extended even to the item of appropriation to gratuity reserve also, when they have specifically stated as follows : Originally an appropriation to gratuity reserve will have to be regarded as a provision made for a contingent liability, for, under a scheme framed by a company the liability to pay gratuity to its employees on determination of employment arises only when the employment of the employee is determined by death in capacity, retirement or resignation-an event (cessation of employment) certain to happen in the service career of every employee ; moreover, the amount of gratuity payable is usually dependent on the employee's wages at the time of determination of his employment and the number of years of service put in by him and the liability accrues and enhances with the completion of every year of service ; but the company can work out on an actuarial valuation its estimated liability (i.e., discounted present value of the liability under the scheme on a scientific basis) and make a provision for such liability not all at once but spread over a number of years. It is clear that if by adopting such scientific method any appropriation is made such appropriation will constitute a provision representing fairly accurately a known and existing liability for the year in question ; if, however, an ad hoc sum is appropriated without resorting to any scientific basis, such appropriation would also be a provision intended to meet a known liability, though a contingent one, for, the expression 'liability' occurring in clause 7(1)(a) of Part III of the Sixth Schedule to the Companies Act includes any expenditure contracted for and arising under a contingent liability ; but if the sum so appropriated is shown to be in excess of the sum required to meet the estimated liability (discounted present value on a scientific basis) it is only the excess that will have to be regarded as a reserve under clause 7(2) of Part III to the Sixth Schedule.(p. 574) Their Lordships of the Supreme Court also held that before any sum or amount is to be qualified for inclusion in capital computation of the company, two conditions are to be fulfilled, viz., (b) that the same must not have been allowed in computing the company's profits for the purposes of the Indian Income-tax Act, 1922 or the Income-tax Act, 1961.
4. In the impugned order of the Commissioner (Appeals) it was the definite contention of the assessee that the provision for gratuity should be taken as a reserve insofar as the said amount has not been allowed as a provision. This assertion was never denied by the revenue.
The ITO while passing his order under Section 13 of the Companies (Profits) Surtax Act, on 18-2-1982 for the assessment year 1975-76 merely stated that when a statute creates a liability the amount set apart for meeting such liability is only a 'provision' and not a 'reserve' forming part of the capital. But, at the same time, he did not state whether any such provision has been allowed in the income-tax proceedings for any of these two assessment years. Further, the Payment of Gratuity Act, which purported to have come into effect from 10-12-1969 in Kerala, was not produced before us. In Highland Produce Co. Ltd.'s case (supra) it is stated that the Kerala Industrial Employees' Payment of Gratuity Ordinance, 1969 came into effect on 10-12-1969 and the Kerala Industrial Employees' Payment of Gratuity Act came into force on 18-2-1970, and it had replaced the Ordinance.
However, in that decision also recognising the provision for payment of gratuity is a contingent liability, the Kerala High Court held : The correct principle of valuation of this contingent liability is to ascertain the present value of the contingent liability which had arisen during the accounting period on actuarial valuation.(p. 804) Therefore, the learned counsel for the assessee agreed that a direction may be given to the ITO to call upon the assessee-bank to file an actuarial valuation regarding the gratuity liability of its employees and the said liability can be spread over years, as held in Vazir Sultan Tobacco Co. Ltd.'s case (supra) by the Supreme Court and whatever excess reserve is found over and above the actuarial valuation, such excess only can be treated as a reserve.
5. After considering all the arguments, we feel that this request is quite just and is in consonance with the ratio laid down by the Supreme Court in Vazir Sultan Tobacco Co. Ltd.'s case (supra). Therefore, we send back the matter to the ITO and direct him to give the assessee a notice to file before him an actuarial valuation of the estimated liability, i.e., the discounted present value of the liability on a scientific basis and allow the assessee to spread over such liability over a number of years and he should consider the excess only as a reserve for purposes of the Second Schedule.
6. Ground Nos. 3 and 5 are common for the assessment years 1975-76 and 1976-77. According to those grounds the case of the assessee is that the amount appropriated through the directors' report to the statutory reserve fund under Section 17 of the Banking Companies Act, 1949, is to be allowed as a deduction in computing the chargeable profits as per Clause (xi) of Rule 1 of the First Schedule to the Companies (Profits) Surtax Act. According to the assessee, the word 'transferred' by a banking company used in Rule 1, Clause (xi) of the First Schedule includes a transfer made by the directors through appropriation also and hence deduction ought to have been allowed. It is common knowledge that the First Schedule deals with chargeable profits and the deductions that are to be allowed therefrom. It is stated in the First Schedule that in computing the chargeable profits of a previous year, the total income computed for that year under the Income-tax Act shall be adjusted as follows : 1. Income, profits and gains and other sums falling within the following clauses shall be excluded from such total income, namely :- (a) any sum which during the previous year is transferred by it to a reserve fund under Sub-section (1) of Section 17 of the Banking Companies Act, 1949 (10 of 1949), or is deposited by it with the Reserve Bank of India under Sub-clause (ii) of Clause (b) of Sub-section (2) of Section 11 of that Act; not exceeding the amount required under the aforesaid provisions to be so transferred or deposited, as the case may be, or The amount transferred, in this case, is Rs. 7 lakhs for the assessment year 1975-76 and Rs. 9,84,967 for the assessment year 1976-77 to the statutory reserve under Section 17 of the Banking Regulations Act, 1949. The Commissioner (Appeals) refused to treat them as transfer by saying that they are merely proposals contained in the report of the directors for the years ending 31-12-1974 and 31-12-1975, respectively.
Subsequently, these proposals were ratified. The Commissioner (Appeals) stated that even applying the ratio of the Supreme Court in CIT v.Mysore Electrical Industries Ltd. [1971] 80 ITR 566 the amount transferred to the reserve fund cannot be treated as an outgoing by way of transfer as on 31-12-1974 or 31-12-1975, since they are effective only from 1-1-1975 and 1-1-1976, respectively, and, therefore, the request for deducting the amount transferred to a statutory 'reserve fund' from the chargeable profits, has been rightly turned down by the ITO, firstly, on the ground that there is no actual transfer and secondly, that the transfer is not effective as on the last day of the relevant previous year. It is submitted by the learned counsel for the assessee that, out of the profits for the year ended on 31-12-1974 (which is the last day of the previous year relevant to the assessment year 1975-76) the assessee-bank transferred an amount of Rs. 7 lakhs to the statutory reserve fund. The proposal for appropriation by the directors was made on 26-4-1975. The said proposal was approved at the general body meeting on 17-6-1975. So also the assessee-bank transferred an amount of Rs. 9,84,967 to the statutory reserve fund out of the profits for the year ended on 31-12-1975 (which is the last day of the previous year relevant to the assessment year 1976-77). The proposal for appropriation was made by the directors on 25-5-1976 and the proposal was approved by the general body meeting on 8-7-1976.
7. The question is whether the amount of Rs. 7 lakhs for the assessment year 1975-76 and Rs. 9,84,967 for the assessment year 1976-77 can be treated as amounts transferred during each of the relevant previous years to the statutory reserve fund under Sub-section (1) of Section 17 of the Banking Companies Act By the Banking Laws (Application to Co-operative Societies) Act, 1965 with effect from 1-3-1966 the long cause title of the erstwhile Banking Companies Act is changed into the Banking Regulation Act, 1949, and as per Section 11(2) of the Banking Laws (Application to Cooperative Societies) Act it is ordained that any reference to the Banking Companies Act, in any law, instrument or document, shall be construed as a reference to the Banking Regulation Act. Therefore, it is clear that from 1-3-1966 the erstwhile Banking Companies Act transformed itself into the Banking Regulation Act. From a reading of rule l(xi)(a) in the First Schedule to the Companies (Profits) Surtax Act, which was already extracted above, it is clear that such of the sums which were transferred into the statutory reserve fund under Sub-section (1) of Section 17 of the Banking Companies Act, is liable to be excluded while computing the total income under the First Schedule. Now let us see the nature of the sum which has to be transferred under the abovesaid provisions by a banking company.
Section 17(1) of the Banking Regulation Act is as follows : Reserve Fund.-(1) Every banking company incorporated in India shall create a reserve fund and shall, out of the balance of profit of each year as disclosed in the profit and loss account prepared under Section 29 and before any dividend is declared, transfer to the reserve fund a sum equivalent to not less than twenty per cent of such profit.
The above provision makes it very clear that it is obligatory on the part of any banking company which earned profits in any previous year to set apart 20 per cent of its profits as disclosed in the profit and loss account and transfer it to the reserve fund. By the nature of the obligation cast on the banking companies which come under the ambit of this section it may be clearly seen that it is a statutory obligation which has to be discharged and, therefore, it is popularly called as 'statutory reserve'. Whether the actual transfer of 20 per cent of the profits is made to the reserve fund in the accounts of the banking companies or not, it is the legal obligation of every banking company who earned profit to do so. Therefore, the moment a banking company earns profit a corresponding statutory liability is incurred by the said banking company to transfer 20 per cent of its profits which would be determined as per its profit and loss account every year and, therefore, there is a statutory liability to transfer a sum equivalent to 20 per cent of profits earned to a reserve fund. In our considered opinion, the ratio of Kedarnath Jute Mfg. Co. Ltd. v. CIT [1971] 82 ITR 363 (SC) would apply to the facts of the case and on the strength of the said decision the assessee can argue that whether actual transfer was made or not to the reserve fund, as it had incurred a legal liability to do so, the transfer should be deemed to have been made.
The moment the assessee-banking company is found to have earned profits as per its profit and loss account prepared for the accounting years relevant to the assessment years 1975-76 and 1976-77, it is expected to transfer 20 per cent of its profits to the reserve fund statutorily under Section 17(1) of the Banking Regulation Act. But, in this case, the invocation of deeming provision is not necessary inasmuch as in the directors' report for the year 1974 and the balance sheet as on 31-12-1974 it is stated that the assessee-bank got a net profit of Rs. 8,18,566.26 and out of the said profit a sum of Rs. 7 lakhs is set apart towards statutory reserve fund for the assessment year 1975-76.
So also, in the report of the directors for the year 1975 and the balance sheet as on 31-12-1975 which is relevant for the assessment year 1976-77 it is stated that an amount of Rs. 11,94,542.02 is the net profit gained in the year ending 31-12-1975 and out of it an amount of Rs. 9,84,966.66 is transferred to the statutory reserve fund. The printed directors' report as well as balance sheets ending with 31-12-1974 and 31-12-1975 were filed before us and in the said statements the profit and loss accounts were also drawn for the years ended 31-12-1974 and 31-12-1975, respectively. Therefore, when once profits are found to have derived as per profit and loss account drawn for the years ended 31-12-1974 and 31-12-1975 the statutory liability to provide a sum equivalent to 20 per cent of the profits is cast on the assessee-bank and in fact it is recommended also by the directors in their reports dated 26-4-1975 for the assessment year 1975-76 and dated 25-5-1976 for the assessment year 1976-77. Therefore, in our considered opinion, even though no actual transfer of any particular amount is made in the accounts of the assessee-bank still 20 per cent of the profits earned can be claimed as amounts deemed to have been transferred to the statutory reserve fund. The only ground on which the deductions of Rs. 7 lakhs and Rs. 9,84,967 were not allowed from out of the total income of the assessee was that the learned Commissioner (Appeals) felt that the Supreme Court decision in Mysore Electrical Industries Ltd.'s case (supra) does not help the assessee. We are one with the Commissioner (Appeals) in holding that the ratio of Mysore Electrical Industries Ltd.'s case (supra) does not hold good and does not help the assessee in this case as regards this deduction is concerned and the more appropriate decision, whose ratio helps the assessee, is in Kedarnath Jute Mfg. Co. Ltd.'s case (supra).
8. Further, this Tribunal had the occasion to consider a similar question in the case of Catholic Syrian Bank Ltd. [ST Appeal Nos. 2 and 3 (Coch.) of 1983 dated 16-4-1985] is furnished to us. At paragraph 3 this point was discussed and a decision also was given in favour of the assessee which is as follows : It is pointed out by the assessee that it is physically impossible to effect an actual transfer during the previous year. The amount to be transferred under Section 17 of the Banking Companies Act is a sum which should not be less than 20 per cent of the profits. It will not be possible for a banking company to close the accounts completely and work out the profits on the last working day of the previous year and to transfer the amount. The accounts have to be collected from the various branches, the profit and loss account and the balance sheet have to be prepared and the various appropriations have to be approved by the board of directors and the general body.
Obviously this cannot be done before the close of the previous year.
It is explained by the learned representative for the assessee that the actual practice is to make the necessary entries in the account books as on the last day of the previous year after the matter has been approved by the board of directors and the general body meeting. Under the circumstances it will not be a proper interpretation of the provisions of Rule 1 of the First Schedule to say that the amount should have been actually transferred to the reserve fund before the close of the previous year. The transfer in the present case has been effected in the normal course and in the only manner possible as far as a banking company like the assessee is concerned. In this context, the assessee relied upon the decision of the Supreme Court in CIT v. Mysore Electrical Industries Ltd. [1971] 80 ITR 566. The question for consideration in that case was whether certain appropriations made by the directors of the company towards capital on 8-8-1963 can be treated as the components of the capital as on 1-4-1963. It was held by the Supreme Court that the appropriations have to be treated as effective from 1-4-1963. It was pointed out by the learned departmental representative that this decision does not help the assessee as it does not say that the appropriations shall be deemed to have been effected earlier to 1-4-1963 or in other words it was pointed out that the decision only lays down that an appropriation made during the course of a year will be treated as part of the capital as on the first day of the year. In the case before the Supreme Court, it was the first year of assessment and the question whether the appropriations should be treated as effective for the earlier year did not arise for consideration. In the light of the circumstances set out earlier, the provisions in rule l(xi) of the First Schedule will become totally unworkable if the contention of the department is accepted.
The only possible manner in which the provision can be given some meaning is to hold that there should have been a transfer to the reserve with reference to the previous year. We, therefore, hold that the assessee is entitled to exclude the sum of Rs. 3,00,000 in computing the chargeable profits.
Therefore, we hold following the decision in Kedarnath Jute Mfg. Co.
Ltd.'s case (supra) and the earlier decision of this Bench in its order dated 16-4-1985 from which we have already extracted above that Rs. 7 lakhs were deemed to have been transferred to the statutory reserve fund in the previous year relevant to the assessment year 1975-76 and Rs. 9,84,967 in the pervious year relevant to the assessment year 1976-77 and in the view we have taken these amounts are liable to be adjusted from the total income while arriving at the chargeable profits under the First Schedule for the assessment years 1975-76 and 1976-77, respectively.
9. One of the grounds raised in the assessment year 1975-76 is that a sum of Rs. 25,000 appropriated from out of the profits of the year relating to the calendar year 1973 by the directors on 16-6-1974 and approved by the general body meeting on 16-6-1974 can constitute a part of capital at the beginning of the year on 1-1-1974 in view of the Supreme Court decision in Mysore Electrical Industries Ltd.'s case (supra). The following is what is held by the Hon'ble Supreme Court : It is well known that the accounts of the company have to be made up for a year up to a particular day. In this case that day was the 31st March, 1963. If it was reasonably practicable to make up the accounts up to the 31st March, 1963, and present the same to the directors of the respondent on April 1, 1963, they could have made up their minds on that day and declared their intention of appropriating the said and other sums to reserves of different kinds. But the fact that they could not do so for the simple reason that the calculation and collection of figures of all the items of income and expenditure of the company for the year ending March 31, 1963, was bound to take some time cannot make any difference to the nature or quality of the appropriation of the profits to reserves as determined by the directors after the first of April, 1963. Their determination to appropriate the sums mentioned to the three separate classes of reserves on the 8th August, 1963, must be related to the 1st of April, 1963, i.e., the beginning of the accounts for the new year and must be treated as effective from that day.(p. 569) In our opinion, having regard to the extracted portion of the Supreme Court decision in the prior paragraph the said amount can be considered as a reserve as on 1-1-1974 and it can be considered as part of the 'other reserve', 15 per cent of which can be deducted from out of the chargeable profits. So also, it is one of the contentions of the assessee in the appeal for the assessment year 1975-76 that the provision for gratuity made on ad hoc basis from out of the profits relating to the year 1973 (Rs. 31,880.10) constituted part of the reserve. It was appropriated towards the provision for gratuity on 16-6-1974. The question is whether it can be treated as part of the capital employed as on 1-1-1974. Our decision in the prior paragraphs regarding the provision for gratuity governs this item also and after the actuarial valuation is filed by the assessee, after it is spread over a number of years reasonably, if any excess is found, over and above the actuarial liability which can be ascribed to the assessment year 1975-76, then such provision which is found to be in excess can be treated as a reserve.
10. Ground No. 6 in the appeal for the assessment year 1975-76 is that interest on sticky advances ought not to have been included as chargeable profit on the ground that no such income arises to the assessee. The assessee itself filed a photostat copy of the Commissioner (Appeals)'s order dated 21-8-1985 relating to these two assessment years, wherein it is held as follows : The next ground is about the merit of the inclusion of interest on sticky advances in the business income of the appellant. This is to be held in favour of the appellant, in view of my own decision for earlier years as well as the decision of the Income-tax Appellate Tribunal, Cochin Bench for some of those years in the appellant's own case. It has been held in appeal for earlier years that interest from sticky advances is not includible in the gross receipts for computing the business income. I would accordingly exclude the interest from sticky advances for the two years under consideration also.
This order of the Commissioner (Appeals) was implemented by the IAC (Assessment), by passing a rectificatory order dated 7-10-1985, a photostat copy of which is also filed before us. As can be seen from the said order, an amount of Rs. 14,625 was deducted from out of the total income determined as per the order dated 15-5-1982, towards interest on sticky advances. Thus, it can be seen that an amendment to the ITO's orders in pursuance of the Commissioner (Appeals)'s order dated 21-8-1985 was already made. Section 14 of the Companies (Profits) Surtax Act, clearly states that where as a result of any order made under Section 154 of the Income-tax Act, it is necessary to recompute the chargeable profits determined in any assessment under this Act, the ITO may proceed to recompute the chargeable profits, and determine the surtax payable or refundable on the basis of such recomputation and make the necessary amendment. Having regard to this provision, we feel that necessary amendment would be made while working out the chargeable profits.
11. Ground Nos. 4 and 6 in the appeal for the assessment year 1976-77 are specifically given up at the time of hearing by the learned counsel for the assessee-bank. Therefore, they are dismissed as not pressed.