Sabyasachi Mukharji, J. - (1.) In this reference under Section 256(1) of the I.T. Act, 1961, the following question has been referred to this court: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that, JUDGEMENT_578_ITR134_1982Html1.htm are to be excluded in computing the capital base for determination of standard deduction under Rule 2(1) of the Rules of the Second Schedule to the Super Profits Tax Act,' 1963."
(2.) We are concerned in this reference with the assessment for the assessment year 1963-64. The assessee is a public limited company. It claimed that the following four items should be included in the computation of the capital base as reserves as these formed other reserves within the meaning of r. 1 of the Second Schedule to the S.P.T. Act, 1963 : JUDGEMENT_578_ITR134_1982Html2.htm
(3.) The ITO, however, held that these four items were in the nature of provisions which were set apart to meet a known liability of which the amount could not be determined with any substantial accuracy and so he did not treat these as reserves and excluded these from the computation of the capital base on which the standard deduction was computed.;