COMMISSIONER OF INCOME -TAX v. RAJKUMAR MILLS LTD - 1985-LL-1205-1

Citation	1985-LL-1205-1
Appellant Name	COMMISSIONER OF INCOME -TAX
Respondent Name	RAJKUMAR MILLS LTD.
Court	ITAT
Relevant Act	Income-tax
Date of Order	05/12/1985
Assessment Year	1973-74, 1974-75, 1975-76
Judgment	View Judgment
Keyword Tags	surtax liability
Bot Summary:	JUDGMENT JUDGMENT The judgment of the court was delivered by SOHANI J.-The order in this case will also govern the disposal of Miscellaneous Civil Case No. 192 of 1984 and Miscellaneous Civil Case No. 251 of 1984. The material facts giving rise to these applications, briefly, are as follows: The assessee is a company and was assessed to surtax for the assessment years 1973-74, 1974-75 and 1975-76. While computing the liability of the assessee under the provisions of the Companies Surtax Act, the assessing authority did not take into consideration the reserve for leave with wages for the purpose of calculating the capital under the provisions of that Act. The Tribunal upheld the order of the Commissioner of Income-tax. An application made by the Department under section 256(1) of the Act was rejected by the Tribunal. Having heard learned counsel for the parties, we have come to the conclusion that the question as to whether the reserve for leave with wages should be taken into account for calculating the capital of the assessee for the purpose of determining the surtax liability is a question of law and it does arise out of the order passed by the Tribunal. The applications are allowed, we direct the Tribunal to state the case and refer the following question of law to this court for its opinion: Whether, on the facts and in the circumstances of the case, the Tribunal erred in holding that'reserve for leave with wages' has to be taken into account for determining the capital of the assessee for the purpose of determining the surtax liability In the circumstances of the case, the parties shall bear their own costs of these applications.

JUDGMENT JUDGMENT judgment of court was delivered by SOHANI J.-The order in this case will also govern disposal of Miscellaneous Civil Case No. 192 of 1984 (CIT v. Rajkumar Mills) and Miscellaneous Civil Case No. 251 of 1984 (CIT v. Rajkumar Mills Ltd). These are applications under section 256(2) of Income-tax Act, 1961 (hereinafter referred to as "the Act"). material facts giving rise to these applications, briefly, are as follows: assessee is company and was assessed to surtax for assessment years 1973-74, 1974-75 and 1975-76. While computing liability of assessee under provisions of Companies (Profits) Surtax Act, assessing authority did not take into consideration reserve for leave with wages for purpose of calculating capital under provisions of that Act. Aggrieved by that order, assessee preferred appeal which was decided by Commissioner of Income-tax (Appeals) in favour of assessee. Aggrieved by order passed by Commissioner of Income-tax (Appeals), Department preferred second appeals before Tribunal. Tribunal upheld order of Commissioner of Income-tax (Appeals). application made by Department under section 256(1) of Act was rejected by Tribunal. Hence, applicant has filed these applications. Having heard learned counsel for parties, we have come to conclusion that question as to whether reserve for leave with wages should be taken into account for calculating capital of assessee for purpose of determining surtax liability is question of law and it does arise out of order passed by Tribunal. applications are, therefore, allowed, we direct Tribunal to state case and refer following question of law to this court for its opinion: " Whether, on facts and in circumstances of case, Tribunal erred in holding that'reserve for leave with wages' has to be taken into account for determining capital of assessee for purpose of determining surtax liability?" In circumstances of case, parties shall bear their own costs of these applications. *** COMMISSIONER OF INCOME -TAX v. RAJKUMAR MILLS LTD.

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