Calcutta H.C : Whether, on the facts and in the circumstances of the case and having regard to the fact that no money was received against the debentures, the Tribunal was right in holding that the said debentures should be included in computing the capital of the assessee- company under clause (iv) of r. 1 of the Second Schedule to the Companies (Profits) Surtax Act, 1964 ?

High Court Of Calcutta

CIT vs. Standard Pharmaceutical Ltd.

Section SURTAX SCH. II

Dipak Kumar Sen & Shyamal Kumar Sen, JJ.

IT Ref. No. 155 of 1977

1st June, 1987

Counsel Appeared

A. C. Moitra & Sunil Mukherjee, for the Revenue : R. N. Dutt, for the Assessee

DIPAK KUMAR SEN, J.:

The CIT, West Bengal-III, seeks a certificate in this application that the judgment and order of this Court dt. 2nd Sept., 1985, involves substantial questions of law and is a fit case for appeal to the Supreme Court. The substantial questions which are stated to arise from the judgment are as follows :

“(1) Whether, on the facts and in the circumstances of the case and having regard to the fact that no money was received against the debentures, the Tribunal was right in holding that the said debentures should be included in computing the capital of the assessee- company under clause (iv) of r. 1 of the Second Schedule to the Companies (Profits) Surtax Act, 1964 ?

(2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the sum credited to the ‘Dividend reserve account’ was a reserve within the meaning of cl. (iii) of r. 1 of the Second Schedule to the Companies (Profits) Surtax Act, 1964, in computing the capital of the assessee-company for the purpose of the assessment under the said Act for the asst. yrs. 1967-68 and 1968-69 ?”

So far as question No. 1 is concerned, it is stated that there is a difference of view between this Court and the Bombay High Court. We are unable to accept this contention of the applicant. We have considered the decision of the Bombay High Court in the case of CIT vs. Century Spg. & Mfg. Co. Ltd. (1978) 111 ITR 6 (Bom). In the said case, the question which arose was in respect of issue of bonus shares and not in respect of debentures and it was held by this Court in the case of the same assessee in CIT vs. Standard Pharmaceuticals Ltd. (1982) 136 ITR 98 (Cal) that the facts before the Bombay High Court were substantially different from the facts in the case of the assessee and that the ratio of the decision of the Bombay High Court would have no application to the facts in the case before this Court.

Even otherwise, the question involves cl. (iv) of r. 1 of the Second Schedule to the Companies (Profits) Surtax Act, 1964, which has since been omitted by the Finance Act, 1976, w.e.f. 1st April, 1977. We are unable to accept the contention of the Revenue that the said question remains a substantial question of law which needs to be considered by the Supreme Court.

So far as question No. 2 is concerned, the same, in our view, has been answered by following the decision of the Supreme Court in the case of Vazir Sultan Tobacco Co. Ltd. vs. CIT (1981) 132 ITR 559 (SC). The said decision was followed in IT Ref. No. 143 of 1975 in the case of the same assessee and in the present reference.

For the reasons aforesaid, we are unable to hold that the other question is also a substantial question of law requiring further consideration by the Supreme Court.

For the reasons as aforesaid, the application cannot succeed. The application is dismissed without any order as to costs.

SHYAMAL KUMAR SEN, J.:

I agree.

[Citation : 177 ITR 142]

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