COMMISSIONER OF INCOME TAX vs ORISSA CEMENT LTD.

Arijit Pasayat, C.J.

At the instance of the revenue, following questions have been referred by the Tribunal, Delhi Bench C, u/s 256(1) of the Income Tax Act, 1961 (hereinafter referred to as the Act) for opinion of this court:

"1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the excess of dividend reserve available after adjusting the actual amount of dividends declared should be included in the capital base for the purpose of calculating net chargeable profit under the Surtax Act, 1964 ?

Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the reserve for doubtful debts should be included in the capital base for the purpose of calculating net chargeable profit under the Surtax Act, 1964 ?

Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the excess provision after taking into consideration the tax liability due from the assessee-company in terms of Second Schedule to the Companies (Profits) Surtax Act, 1964 shall be considered for the purpose of the statutory deduction for calculating the net chargeable profits ?"

All these questions have been dealt with by the Apex Court in several cases and, Therefore, it is not necessary to go into factual aspects of the case in detail.

So far as the first question is concerned, decision of the Apex Court in Indian Tube Co. P. Ltd. Vs. Commissioner of Income Tax, has dealt with a similar question. Following the view expressed in the said case, we answer the question in the affirmative in favor of assessed and against the revenue.

So far as the second question is concerned, the matter came to be examined by the Apex Court in two decisions in Commissioner of Income Tax Vs. Jyoti Ltd., and State Bank of Patiala, Patiala Vs. Commissioner of Income Tax, Patiala, . Following the aforesaid decisions, we answer the question in the affirmative, in favor of the assessed and against the revenue.

So far as the third question is concerned, decisions of the Apex Court in M/s. Karamchand Premchand Pvt. Ltd. etc., etc. Vs. The Commissioner of Income Tax, Gujarat etc., etc., and Commissioner of Income Tax (Central-II), Calcutta Vs. M/s. Duncan Brothers and Co. Ltd., Calcutta, dealt with the issue. Following the decisions in the aforesaid cases, we answer the question in the affirmative in favor of assessed and against the revenue.

The reference application is disposed of accordingly.