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TMI Blog1992 (11) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... arises under section 256(1) of the Income-tax Act, 1961, by reason of section 18 of the Companies (Profits) Surtax Act, 1964. The assessee is a limited company and the period involved is the assessment year 1971-72. The relevant previous year was December 1, 1969, to November 30, 1970. All the questions pertain to the computation of capital which is required to be done on the first day of the acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year 1971-72 proportionately having regard to the deductions given to it under sections 80-I and 80L of the Income-tax Act, 1961 ? (3) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the following items should not be deducted by the Surtax Officer while computing the assessee company's capital base for the assessment year 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mere fact that it has been subsequently transferred to the general reserve account cannot make any difference. The Division Bench has held that only that part of the reserve will constitute a reserve as is found to be in excess of the assessee's liability in that regard on the basis of actuarial valuation as on the relevant date. This ratio directly applies to the present case. Hence, question No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility. In view of the decision in the case of Vazir Sultan, Tobacco Co. Ltd. v. CIT [1981] 132 ITR 559 (SC), this question must be answered in the affirmative and in favour of the assessee. The second part, that is to say, part 3(b), deals with the provision for contingencies. The provision for contingencies was made against certain claims advanced by the staff for additional salary, dearness allo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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