COMMISSIONER OF Income Tax vs CALCUTTA ELECTRIC SUPPLY CO. LTD.

DIPAK KUMAR SEN J. - In this application, the Commissioner of Income Tax, West Bengal-1, seeks a certificate from us that the judgment delivered by the court in Income Tax Reference No. 32 of 1977 dated May 6, 1985, involves a substantial question of law and is a fit case for appeal to the Supreme Court.

It appears from the said judgment dated May 6, 1985, that this court followed its earlier decision in the case of the same assessee in Commissioner of Income Tax Vs. Calcutta Electric Supply Corporation Ltd., .

It was submitted on behalf of the applicant that subsequent to the said decision, the Supreme Court has further laid down the law on the controversy in Vazir Sultan Tobacco Co. Ltd., Hyderabad and Others Vs. Commissioner of Income Tax, Andhra Pradesh, Hyderabad, . The question involved in the present proceedings was whether the special appropriation for plant expansion and contingencies constituted reserves for the purpose of computing capital under the Second Schedule to the Companies (Profits) Surtax Act, 1964. It was submitted that the said items were not specifically considered in Vazir Sultan Tobacco Co. Ltd., Hyderabad and Others Vs. Commissioner of Income Tax, Andhra Pradesh, Hyderabad, and, therefore, the matter needs further consideration by the Supreme Court.

We are unable to accept the contentions of the applicant. Similar sub-missions were made before this court in Commissioner of Income Tax Vs. Sijua (Jharriah) Electric Supply Co. Ltd., , where the items involved were reserve for contingencies and reserve for debenture redemption for the purpose of computation of the capital under the Companies (Profits) Sur-tax Act, 1964. In that case the earlier decision of this court in Commissioner of Income Tax Vs. Calcutta Electric Supply Corporation Ltd., was followed. The decision of the Supreme Court in Vazir Sultan Tobacco Co. Ltd., Hyderabad and Others Vs. Commissioner of Income Tax, Andhra Pradesh, Hyderabad, was also cited and considered. It was noted in the said judgment that the Supreme Court dismissed a SLP filed by the Revenue against a decision of the Madras High Court in Commissioner of Income Tax Vs. Palani Andavar Mills (P.) Ltd., , where the question involved was whether the contingency reserve was includible in computing the capital of a company for the purpose of surtax. It was held that such a contingency reserve was in the nature of general reserve and was includible for the purpose of computation of the capital.

For the reasons as above, it appears to us that the law stands settled by the decisions of this court as also of the Supreme Court.

This application is, therefore, dismissed without any order as to costs.

SHYAMAL KUMAR SEN J. - I agree.