TMI Blog1974 (6) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... reserves can be treated as reserves - - - - - Dated:- 26-6-1974 - Judge(s) : G. RAMANUJAM., V. RAMASWAMY. JUDGMENT For the assessment year 1962-63 corresponding to the previous year ended March 31, 1962, the assessee which is a public limited company claimed deduction of the following reserves as on March 31, 1972, for determining the capital base for the purpose of the Super Profits Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vision. made for payment of taxes and proposed dividends cannot be treated as reserves for the purpose of computing the capital base. For that view the Tribunal relied on the decisions of the Supreme Court in Kesoram Industries Cotton Mills Ltd. v. Commissioner of Wealth-tax and Commissioner of Income-tax v. Century Spinning Manufacturing Co. Ltd. Regarding the excess depreciation the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n for taxation, for dividend and for development rebate could be treated as reserves within the meaning of rule 1 of Schedule 2 to the Super Profits Tax Act, 1963. After considering the relevant provisions of the statute and the decided cases on the point, we have held as regards the provision for taxation that the amount paid out by the company for discharging the actual tax liability cannot be t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss provision made for taxation which alone can be treated as a reserve. This question will, therefore, be considered by the Tribunal at the time of passing the consequential order. As regards the provision for dividend, it has been held in the said earlier judgment of this court in Nagammal Mills Ltd. v. Commissioner of Income-tax, that the amount set apart as a provision for dividend is for pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company for its business purpose, it should be treated as a reserve within the meaning of rule 1 of Schedule 2 of the Act Following that view, we have to hold that the sum of Rs. 1,31,000 which is found to be excess of the amount of depreciation allowed for tax purposes has to be treated as a reserve for the purpose of the Super Profits Tax Act, 1963. The question referred is, therefore, answered ..... X X X X Extracts X X X X X X X X Extracts X X X X
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