Law: Income Tax Act, 1922

Section:

Income-tax----Company---Surtax---Computation of capital---Dividends declared--¬Deductible---Indian Companies (Profits) Surtax Act, 1964, Sched. II, R.1. Dividends declared should .be deducted from the capital for the purpose of surtax assessment. Indian Tube Co. (P.) Ltd. v. CIT (1992) 194 ITR 102 (SC) fol. Indian Tube Co. Ltd. v. CIT (1981) 132 ITR 293 (Cal.) (Appex) ref . JUDGMENT K. A. THANIKKACHALAM, J.---In compliance with the directions of this Court given in T. C. P. Nos. 26 and 27 of 1980, dated January 5, 1981, the Tribunal referred the following two common questions for the opinion of this Court: "(1) Whether, on the facts and in the circumstances of the case, and having regard to the provisions of Explanation to rule 1 of the Second Schedule to the Companies (Profits) Surtax Act, 1964, the Appellate Tribunal was correct in holding that the sum of Rs.3,70,000 for the assessment years 1972-73 and 1973-74 representing dividends declared should not be deducted from the capital for the purpose of surtax assessments? (2) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was correct in holding that the general reserves as on the first day of the previous year should not be reduced by the amount of dividend declared at a future date at the general body meeting for the purpose of computing the capital under the Companies (Profits) Surtax Act, 1964?" Since the figures given in the questions are not correct, we are refraining the questions.4s under: "Whether on the facts and in the circumstances of the case and having regard…

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