Bombay H.C : Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the sum of Rs. 14,40,000 being dividend for 1970 calendar year should not be excluded from the general reserve for the purpose of computing the capital base under the Surtax Act, 1964 ?

Counsel Appeared

Dr. V. Balasubramanian, J. P. Devadhar & K. C. Sidhwa, for the Revenue : F. V. Irani, i/b Crawford Bailey & Co., for the Assessee

S. P. BHARUCHA, J. :

The two questions to be, answered in this reference relate to the asst. yr. 1972-73. They read thus :

“(1) Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the sum of Rs. 14,40,000 being dividend for 1970 calendar year should not be excluded from the general reserve for the purpose of computing the capital base under the Surtax Act, 1964 ?

(2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that r. 4 under the Second schedule to the Surtax Act did not apply, since the deduction allowed under s. 80-I formed part of the total income ?”

The first question must be answered in the negative and in favour of the Revenue, having regard to the judgment in Vazir Sultan Tobacco Co. Ltd. vs. CIT (1981) 25 CTR (SC) 186 : (1981) 132 ITR 559 (SC). The second question, it is agreed, is covered by the decision in CIT vs. Century Spg. and Mfg. Co. Ltd. 1977 CTR (Bom) 132 : (1978) 111 ITR 6 (Bom). The question is, accordingly, answered in the affirmative and in favour of the assessee.

No order as to costs.

[Citation :181 ITR 385]