ALUMINIUM INDUSTRIES LIMITED Vs. COMMISSIONER OF INCOME TAX
HIGH COURT OF KERALA
ALUMINIUM INDUSTRIES LTD.
COMMISSIONER OF INCOME-TAX
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(1.) THIS is a reference at the request of the assessee by the Income-tax Appellate Tribunal, Madras Bench. The assessee is a public limited company, the Aluminium Industries Limited, Kundara.
(2.) THE assessment year concerned is 1963-64; and the accounting period, the 12 months ended on March 31, 1963. THE question referred is :
" Whether, on the facts and circumstances of the case, the sum of Rs. 3,27,446 under ' Reserves and Surplus' in the balance-sheet, is to be taken into consideration in computing the capital of the applicant-company for the purpose of determining the standard deduction as contemplated in Sub-section (9) of Section 2 of the Super Profits Tax Act, 1963, and the Schedules mentioned therein? "
Section 4 is the charging section of the Act. That section reads as follows :
"Subject to the provisions contained in this Act, there shall be charged on every company for every assessment year commencing on and from the 1st day of April, 1963, a tax (in this Act referred to as the super profits tax) in respect of so much of its chargeable profits of the previous year or previous years, as the case may be, as exceed the standard deduction, at the rate or rates specified in the Third Schedule. "
In order to tax under Section 4, two things have to be ascertained :
(1) the chargeable profits of the previous year or previous years, as the case may be ; and
(2) the standard deduction.
(3.) IT is the excess of the chargeable profits over the standard deduction that attracts the tax at the rate or rates specified in the Third Schedule.
The expression " chargeable profits " is defined in Section 2(5) of the Act. According to that definion, "chargeable profits" means " the total income of an assessee computed under the Income-tax Act, 1961 (43 of 1961), for any previous year or years, as the case may be, and adjusted in accordance with the provisions of the First Schedule ". The quantum of the chargeable profits is not in dispute in this case.;
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