Court : Mumbai
Reported in : (1986)52CTR(Bom)176; [1986]160ITR700(Bom); [1986]24TAXMAN273(Bom)
..... the supreme court in that judgment has pointed out that the expression 'reserve' has not been defined in the super profits tax act, 1963, or the companies (profits) surtax act, 1964. ..... this is a reference under section 256(1) of the income-tax act, 1961, as applied to the companies (profits) surtax act, 1964, by section 18 of the latter act. ..... assessment year 1964-65 :'whether, on the facts and in the circumstances of the case, the following amounts were includible in the computation of capital of the assessee under rule 1 of the second schedule to the companies (profits) surtax act, 1964 : rs. ..... the questions referred pertain to the computation of capital or capital base, as it is called, for the purpose of the companies (profits) surtax act, 1964. ..... assessment year 1965-66 :'whether, on the facts and in the circumstances of the case, the following amounts were includible in the computation of capital of the assessee under rule 1 of the second schedule to the companies (profits) surtax act, 1964 : rs. ..... section 4 of the companies surtax act, in brief, provides that subject to the provisions of that act, there shall be charged on every company for every assessment year commencing on and from the 1st day of april, 1964, a tax on so much of its chargeable profits of the previous year or previous years, as the case may be, as exceed the statutory deduction, at the rate or rates specified in the third schedule. .....
Tag this Judgment!Court : Mumbai
Reported in : (1991)91CTR(Bom)163; [1992]194ITR167(Bom)
..... income may contain various different kinds of income some of which are to be excluded for the purpose of computing chargeable profits under the companies (profits) surtax act 1964, one such exclusion under rule 1 (x) is in respect of income by way of the interest received from the government or any india concern in the case of the non-resident company which has not made the prescribed arrangements for the declaration and the payment of dividends with in india. ..... questions of law have been referred to us under section 256(1) of the income-tax act, 1961, as applied to the surtax act by virtue of section 18 thereof :'(1) whether, on the facts and in the circumstances of the case, the tribunal was right in holding that the income by way of interest on securities' derived by the assessee-company from securities of the central government constituted income by way of any interest from government as contemplated under rule 1(x) of the first schedule to the companies (profits) surtax act, 1964 ? ..... the net interest received by it from indian companies as also the net interest received by the assessee from taxable government securities should be excluded from the total income for the computation of surtax by reason of rule 1(x) of the first schedule to the companies (profits) surtax act, 1964 (hereinafter referred to as 'the surtax act'). ..... it is, therefore, necessary to consider the scheme of the companies (profits) surtax act, 1964, and the provisions of the first schedule where rule 1(x) .....
Tag this Judgment!Court : Supreme Court of India
Reported in : [1996]220ITR281(SC); JT1996(5)SC348; 1996(4)SCALE246; (1996)9SCC10; [1996]Supp2SCR253
..... is proportional to the portion of the previous year during which the increase or the reduction of the paid up share capital remained effective.rule 3 of the second schedule of the companies (profits) surtax act, 1964.where after the first day of the previous year relevant to the assessment year the capital of a company as computed in accordance with the foregoing rules of this schedule is increased by any amount during the previous year on account of increase of paid up share capital or issue of debentures or borrowing ..... since any 'increase' in the paid up capital of the company was to be properly reckoned for the purpose of computation of capital under rule 3 of schedule ii of the companies (profits) surtax act, 1964 (hereinafter referred to as surtax act, 1964), it was claimed that the proportionate amount, worked out to rs. ..... a reference was made by the taxing department under section 256(1) of the income tax act, 1961 before the madras high court for answering, inter alia, the following question:whether on the facts and in the circumstances of the case and having regard to rule 3 of schedule ii of the companies (profits) surtax act, 1964 the share capital of the company should be increased proportionately on account of the issue of bonus shares for the purpose of computation of capital under the companies (profits) surtax act, 1964?5. ..... later on, super profits tax act, 1963 and the companies (profits) surtax act, 1964, were enacted for similar purpose. .....
Tag this Judgment!Court : Chennai
Reported in : [1995]216ITR26(Mad)
..... companies (profits) surtax act, 1964, hereinafter referred as 'the surtax act ..... should be taken into account in computing the capital of the company for the purpose of the companies (profits) surtax act, 1964.' 20. ..... debenture redemption reserve should be taken into account in the capital computation for levy of surtax under the companies (profits) surtax act, 1964?' 2. ..... that a debenture redemption fund which was created by appropriation of profits from the profit and loss appropriation account, when there was no liability of the current year which had to be met by the said fund in redeeming debentures in that year, and the funds had been set apart for use only in future, was a reserve and had to be included in the capital base for the purpose of the companies (profits) surtax act. ..... surtax act was enforced to impose a special tax on the profits of companies in respect of so much of their chargeable profits of the previous years as exceeded the statutory deduction at the rate or rates specified in the third schedule of the act for every assessment year commencing on and from the first day of april, 1964 ..... area of reserve for the purpose of inclusion in the capital for the purposes of knowing the quantum of statutory deduction and accordingly to compute chargeable profits, for the purposes of the surtax act, one could think that persons who have been regularly dealing with trading accounts of companies found no difficulty in specifying such reserve, which qualified for the said purpose. .....
Tag this Judgment!Court : Punjab and Haryana
Reported in : (1992)106CTR(P& H)277; [1993]203ITR150(P& H)
..... that the amounts provided by the assessee for bad and doubtful debts in the balance-sheets of the relevant previous years qualified as reserves for the purpose of clause (xi)(b) of rule 1 of the first schedule to the companies (profits) surtax act, 1964, and consequently, allowing yearwise deduction as under : rs.1971-727,00,0001972-7313,78,0001973-7422,11,0001975-7615,98,000 (ii) whether, on the facts and in the circumstances of the case, the appellate tribunal was right in law in ..... year for bad and doubtful debts in the balance-sheets of the relevant periods constitute a 'reserve' as contemplated under rule l(xi)(b) of the first schedule and rule l(iii) of the second schedule to the companies (profits) surtax act, 1964 (hereinafter called 'the 1964 act').3. ..... a provision with regard to the sum that might become liable to be paid is 'other reserves' 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 purpose of the companies (profits) surtax act, 1964.'16. ..... the contention of the assessee that bad and doubtful debts in the case of every company must necessarily be treated as reserves within the meaning of the companies (profits) surtax act. ..... the beginning of the relevant accounting year respectively for the assessment years 1971-72, 1972-73, 1973-74 and 1975-76 qualified as a reserve for inclusion in the capital of the assessee under the second schedule to the companies (profits) surtax act ?' 2. .....
Tag this Judgment!Court : Kerala
Reported in : [1986]159ITR431(Ker)
..... the assessee's claim for deduction under section 37 of the income-tax act, 1961, of the amount paid as surtax under the companies (profits) surtax act, 1964 (hereinafter referred to as the 'surtax act'), was disallowed by the income-tax officer, but, on appeal, it was allowed by the appellate assistant commissioner. ..... in estimating, for income-tax purposes, the annual income of its business, the assessee company claimed to deduct a sum of rs, 76,777 representing the surtax, levied under the companies (profits) surtax act, 1964, for short ' the surtax act'. ..... these provisions show that what is charged under the surtax act is profit, although the levy is not on the total profits, but only on so much of the 'chargeable profits' (which means the total income of the company computed under the income-tax act and adjusted in the manner provided under the first schedule to the surtax act) as exceed the statutory deduction, namely, an amount equal to ten per cent. ..... the preamble to the surtax act says :' an act to impose a special tax on the profits of certain companies. ..... --subject to the provisions contained in this act, there shall be charged on every company for every assessment year commencing on and from the 1st day of april, 1964, a tax (in this act referred to as the surtax) in respect of so much of its chargeable profits of the previous year or previous years, as the case may be, as exceed the statutory deduction, at the rate or rates specified in the third schedule. .....
Tag this Judgment!Court : Mumbai
Reported in : [1977]107ITR241(Bom)
..... reserves itself and therefore, did not come under the mischief of the explanation to rule 1 of schedule ii of the companies (profits) surtax act, 1964 (2) whether, on the facts and in the circumstances of the case, the reserve for employees' indemnities was correctly treated as forming part of the reserves and the capital for purposes of capital computation for surtax purposes (3) whether, on the facts and in the circumstances of the case, the excess reserve though forming part of the ..... the assessee in this case is a public limited company and in connection with its assessment under the companies (profits) surtax act, 1964, for the said assessment year certain items were claimed by the assessee as forming part of the reserve being includible in the capital computation of the company for the purpose of that act and we shall deal with each of these items forming the subject-matter of the above three questions separately. ..... in the first place, the explanation to rule 1 of the second schedule to the companies (profits) surtax act, 1964 (which we have quoted above), on which reliance has been placed by him, would, strictly speaking, be inapplicable to the facts of the ..... the income-tax officer acting under the explanation to rule 1 of the second schedule of the companies (profits) surtax act, 1964, treated the general reserve ..... the revenue invited our attention to the explanation to rule 1 of the second schedule to the companies (profits) surtax act, 1964, which runs thu : 'explanation. .....
Tag this Judgment!Court : Mumbai
Reported in : [1977]108ITR987(Bom)
..... of the assessee-company came up, under the companies (profits) surtax act, 1964 (act no. ..... that section provides that subject to the provisions contained in the act, there shall be charged on every company for every assessment year commencing on the from the first day of april, 1964, a tax (in this act referred to as 'the surtax') in respect of so much of its chargeable profits of the previous year or pervious years, as the case may be, as exceed the statutory deduction, at the rate or rates specified in ..... dastur on behalf of the assessee-company in this reference submitted that capital of the assessee-company has to be computed for the purpose of the act as provided in schedule ii of the act; that schedule ii of the act lays down the rules for computing the capital of a company for the purposes of surtax; that under rule 1 the capital of a company shall be the aggregate as on the first day of the previous year relevant of the assessment year of the various amounts enumerated in clauses ..... not designed to meet a liability, contingency, commitment or diminution in value of assets known to exist at the date of the balance-sheet is a reserve, but an amount set aside out of profits and other surpluses to provide for any known liability of which the amount cannot be determined with substantial accuracy is a provision (see william pickles accountancy, second edition, page 192; part iii, clause 7, schedule vi to the companies act, 1956, which defines provision and reserve).' 10. .....
Tag this Judgment!Court : Supreme Court of India
Reported in : (2005)198CTR(SC)106; [2005]278ITR102(SC); JT2005(8)SC416; (2005)7SCC541
..... (supra), are virtually identical to the provisions of the companies (profits) surtax act, 1964 and since the said judgment directly and squarely covered the instant ..... this context, it is beneficial to refer to the specific finding of the commissioner of income tax (appeals) which reads as under-'explanation 1 of rule 2 of the second schedule of the companies (profits) surtax act 1964 relied upon by the a/o reads as under:-'explanation 1. ..... is also to be noted that the above case was under the provisions of the business profits tax act, 1947 which had provisions similar to the companies (profits) surtax act 1964. ..... the assessment of the appellant company under the provisions of the companies (profits) surtax act, 1964, the question arose as to whether the said capital reserve was to be included while computing the capital of the appellant company. ..... /- representing the difference between the value of assets taken over and consideration allowed by the reserve bank of india was rightly included by the assessee company for computing the capital to determine the statutory deduction under the companies (profits) surtax act, 1964. ..... the high court has completely failed to appreciate the true meaning and real effect in law of explanation 1 to rule 2 of the second schedule to the companies (profits) surtax act, 1964. ..... present case involves an important question of law with regard to the interpretation of explanation 1 to rule 2 of the second schedule to the companies (profits) surtax act, 1964.3. .....
Tag this Judgment!Court : Supreme Court of India
Reported in : (1996)133CTR(SC)57; [1996]219ITR388(SC)
..... with regard to the sum that might become liable to be paid 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 purpose of the companies (profits) surtax act, 1964.in connection with the question whether bad and doubtful debts reserve created by the assessee in that case was a reserve or not it was observed as under:bad and doubtful debts reserve was created ..... the income tax appellate tribunal, ahmedabad referred the following question for the opinion of the high court of gujarat under section 18 of the companies (profits) surtax act, 1964 [hereinafter referred to as 'the surtax act') read with section 256(1) of the income tax act, 1961:whether, on the facts and in the circumstances of the case, the tribunal was correct in law in holding that reserve for doubtful debts and gratuity reserve created by the assessee were includible in ..... questions one of the question which fell for consideration in that case was whether a gratuity reserve created by the company was a reserve in the true sense of the term or was merely a provision which could not be included in the capital base of the assessee-company for computing its surtax liability under the surtax act. ..... the meanings attached to the words 'reserves' and 'provisions' in the companies act, 1956, dealing with the preparation of the balance-sheet and the profit and loss account would govern their construction for the purposes of the two .....
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