- (1.) Heard counsel for both the parties.
(2.) This appeal has to be allowed following the decision of this court in Vazir Sultan Tobacco Co. Ltd. v. CIT.
(3.) The relevant facts are the following: For Assessment Year 1963-64, (accounting year ending June 1962, the company had made a provision in a sum of Rs 1,62,000. 00 towards dividends proposed to be declared. In the proceedings under the Super Profits Tax Act, the assessee contended that the said amount of Rs 1,62,000. 00 should be treated as a reserve and should be taken into consideration while calculating the capital base. This was rejected by the Super tax Officer. On appeal, the appellate Assistant Commissioner agreed with the assessee whose view was affirmed in appeal by the tribunal. Thereupon, the following question was referred for the opinion of the High court: "Whether, on the facts and in the circumstances, the provision for proposed dividend of Rs 1,62,000. 00 is a reserve for the purpose of computation of capital of the assessee-Company under the Super Profits Tax Act, 1963. ";