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1961 (1) TMI 7 - SC - Income TaxWhether on the facts and in the circumstances of the case 'Undivided Profits' of $ 29,534,614.21 shown in the condensed statements of conditions as of December 31, 1946, can be treated as reserves and added to the capital, as required by rule 2(1) of Schedule II to the Business Profits Tax Act for the chargeable accounting period December 25, 1946, to December 24, 1947 ? Held that:- The amount designated as " Undivided Profits " is a part of the reserves and has to be taken into account when computing the capital and reserves within rule 2(1) of Schedule II of the Act. The question which was referred by the Tribunal should have been decided in the affirmative and in favour of the appellant and the amount should have been added to the capital as allowed by rule 2(1) for the chargeable accounting periods. In the result the appeal is allowed. Appeal allowed.
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