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2005 (9) TMI 79 - SC - Income TaxWhether the reserve of Rs. 1,43,89,055 is a reserve brought into existence by creating or increasing any book asset or not? Held that:- The Division Bench, in our view, has grossly erred in stating that the appellant had obviously received benefits in the computation of income-tax on account of assets taken over by the appellant from other tea companies and that, therefore, the reserve in question could not be treated as a component of the capital for the purposes of surtax assessment. Such a new case was neither advanced by the Revenue before the High Court, nor could such a case at all be considered by the High Court inasmuch as it did not at all arise out of the order by the Appellate Tribunal. The provisions of the Business (Profits) Tax Act, 1947 which were interpreted by this court in Standard Vacuum Oil Co. [1965 (10) TMI 24 - SUPREME Court] are virtually identical to the provisions of the Companies (Profits) Surtax Act, 1964, and since the said judgment directly and squarely covered the instant case, in our opinion, the High Court has committed a patent error in completely disregarding the judgment of this court in Standard Vacuum Oil Co. and in reversing the well considered order of the Appellate Tribunal which has decided the matter in favour of the appellant and as a consequence of the impugned order of the High Court, the huge tax liability was created on the appellant without any warrant or justification whatsoever. In favour of assessee. No hesitation to set aside the order passed by the High Court impugned in these appeals and restore the order passed by the Tribunal.
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