1984 (5) TMI 9

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..... he following questions have been referred to us under section 256(1) of the Income-tax Act, 1961, for the assessment year 1970-71 : " 1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was correct in holding that the amount of Rs. 78,00,000 transferred to an account styled as 'contingency reserve' represented reserve and was deductible from chargeable profits un .....

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..... es " as they did not relate to any real existing liability. Similar situation exists in the present assessment. Following that judgment, we answer the questions referred to us in the affirmative. The amounts transferred to contingency reserve are " reserves ". They have to be treated as such for the purpose of the Companies (Profits) Surtax Act, 1964. Parties will bear their own costs.
Case la .....

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