Law:

Section:

Rule 1 of the Second Schedule of the Companies (Profits) Surtax Act, 1964 - Capital - Computation of - Whether, amounts standing under 'capital redemption reserve' meant to redeem certain preference shares of assessee-company, are includible while computing assessee's capital base in terms of rule 1 of Second Schedule -Held, yes Facts The assessee-company had created a 'capital redemption reserve' for the purpose of redeeming its preference shares. The ITO refused to take it as one of the items to be taken into account while computing the assessee's capital base in terms of the Second Schedule. The Tribunal, however, reversed the ITO's order. On reference : Held The Sixth Schedule to the Companies Act prescribes the form in which the balance sheet shall be prepared by a company. The proforma contains separate columns for liabilities and assets. Under the heading 'Reserves and surplus' in the column 'liabilities', seven types of reserve/funds are mentioned. Among them 'capital redemption reserve' is No. 2. This clearly shows that capital redemption reserve is a 'reserve'. Now, the Explanation to rule 1 says that any amount standing to the credit of any account in the books of the company, which is in the nature of item 5,6 or 7 under the heading 'Reserves and surplus' in the column relating to 'liabilities' in the aforesaid proforma, shall not be regarded as a 'reserve' for the purpose of computation of the capital base of the company. This would, by necessary implication, mean that 'capital redemption reserve' is one of the reserves to be taken into account for computing the capital base. The Tribunal's view on this point was, therefore, to be upheld. Rule 1(vii) of the First Schedule of the Companies (Profits) Surtax Act, 1964 - Chargeable profits - Whether while computing chargeable profits under the Companies (Profits) Surtax Act, 1964 amount deductible under clause (vii) of rule 1 of the First Schedule to the Companies (Profits) Surtax Act, is 50 per cent of amount actually donated by assessee under section 80G(2) of the 1961 Act and not 50 per cent of amount of deduction allowed under section 80G - Held, yes FACTS During the previous year relevant to the…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492