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Interpretation of section 2(9) of the Companies (Profits) Surtax Act, 1964 regarding the assessee's liability to be assessed under the Act. Detailed Analysis: The case involved a non-resident shipping company incorporated in Sweden being assessed under the Companies (Profits) Surtax Act, 1964. Initially, the Income Tax Officer (ITO) assessed the company's profits under the Surtax Act for the assessment years 1965-66 and 1966-67. The Assessing Appellate Commissioner (AAC) upheld the assessment, stating that the company fell within the definition of a company under the Income Tax Act, 1961, and thus was liable to be taxed under the Surtax Act. The AAC also referred to specific provisions in the Surtax Act to support this interpretation. The company appealed this decision before the Tribunal, arguing that the Agreement for Avoidance of Double Taxation between India and Sweden did not allow for the levy of surtax on a Swedish company's profits attributable to operations in India. However, this argument was rejected by the Tribunal. The main contention before the Tribunal was that the company did not qualify as a company under the charging section of the Surtax Act. The company's counsel argued that the Surtax Act lacked a specific definition of company and that the provisions of the Companies Act, 1956 did not apply to non-resident companies, thus the Surtax Act could not be applied to the company. The Tribunal disagreed with the company's arguments, stating that the absence of a specific definition of company in the Surtax Act did not exclude non-resident companies from its purview. The Tribunal emphasized that the term 'company' should be understood in common and legal parlance, encompassing all incorporated companies regardless of their origin. Additionally, the Tribunal highlighted the provision in section 2(9) of the Surtax Act, which mandates that the term 'company' should be interpreted in line with the definition in the Income Tax Act, 1961. The High Court concurred with the Tribunal's decision, stating that the term 'company' should be broadly interpreted to include all incorporated entities. The Court noted that the absence of a specific definition in the Surtax Act necessitated a common understanding of the term 'company.' The Court also rejected the argument that the definition in the Income Tax Act was only applicable within the context of that Act, emphasizing the general understanding of companies in legal parlance. Citing the principle that a special definition in a statute should not be extended beyond its scope, the Court affirmed the Tribunal's decision, ruling in favor of the revenue. In conclusion, the High Court upheld the Tribunal's decision, affirming the company's liability to be assessed under the Companies (Profits) Surtax Act, 1964.
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