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TMI Blog1993 (6) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income-tax Appellate Tribunal erred in law in holding that aggregate funds of the trust invested in the concern did not exceed five per cent. of the capital of that concern ? (3) If reply to either question No. 1 or question No. 2 is against the assessee, whether the assessee was entitled to urge before the Appellate Tribunal that the Appellate Assistant Commissioner erred in holding that deficit of Rs. 2,739 in the assessment year 1971-72 and of Rs. 5,881 in the assessment year 1972-73 incurred by the assessee in school section should not be available as set off against the other income while computing the total income though such point was not urged before the Appellate Assistant Commissioner ? (4) If reply to question No. 3 is in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated above. It is not disputed that, if it is held that the capital of the concern under section 13(4) would not include reserves, then the aggregate funds of the trust invested in the trust did exceed five per cent. of the capital of that concern. Therefore, what we have to consider first is as to whether the word "capital" as employed in section 13(4) would include reserves. The assessee had invested its funds with Messrs. C. Doctor and Company Private Limited and Mehta Corporation Private Limited. Now, in a case of a company, capital would ordinarily mean share capital. Sections 85 and 86 of the Companies Act make that position clear. If shares are issued at a premium, then the amount of premium received by the company may be regarded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ol and the income received from the school admittedly was not required to be included in the total income of the assessee as it did not form part of the total income of the assessee. The deficit incurred by the assessee was obviously not available as set off against the other income which could be taken into consideration while computing the total income. In the result, questions Nos. 1 and 2 are answered in the negative, that is, in favour of the Revenue and against the assessee. Question No. 3 is answered in the affirmative, that is, against the Revenue and in favour of the assessee. Question No. 4 is answered in the negative, that is, in favour of the Revenue and against the assessee. Reference is disposed of accordingly. No order as to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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