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2016 (9) TMI 450 - HC - Income TaxCapital computation - Companies (Profits) Surtax Act, 1964 - Tribunal held that the amount be reduced from the General Reserve being the amount transferred from the profit of the last year for the purpose of capital computation? - Held that:- We find that the issue raised herein above stands concluded against Applicant-Assessee and in favour of the Respondent-Revenue by a virtue of the decision of this Court in CIT v/s. Bharat Bijlee Ltd.[1976 (7) TMI 38 - BOMBAY High Court ]. Mr. Thakkar, learned Counsel appearing for the Applicant-Assessee sought to distinguish the same by pointing out that in the case of Bharat Bijlee Ltd., (supra), the amount was set aside on the last date of the previous year of the earlier Assessment Year. In this case also, the amount of ₹ 25,000/was transferred to the general reserve from the profits of the earlier year. Thus, reducing the capital only by ₹ 25,000/and not ₹ 91,000/as done by the Assessing Officer and CIT(A).Accordingly, question as posed for our opinion is to be answered in the affirmative i.e. in favour of the Respondent-Revenue and against the Applicant-Assessee. Debentures issued to Indian Medical Research Society - whether were not includable in the capital computation? - Held that:- Debentures were redeemable at the option of the Applicant-Assessee at any time by giving three calender months prior notice, even before the expiry of seven years from the date of issue. Thus, they are required to be included in the capital of the company in terms of subrule (iv) to Rule 1 of the Second Schedule to the said Act.In the above view, question (b) as framed for our opinion is answered in the affirmative i.e. in favour of the Respondent-Revenue and against the Applicant-Assessee.
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