Ajit K.Sengupta, J. - (1.) In this reference under Section 256(1) of the Income-tax Act, 1961, for the assessment year 1979-80, the following questions of law have been referred to this court : "1. Whether, on the facts and in the circumstances of the case and specially when the assessee itself claimed that the excise duty liability was a determined one, the Appellate Tribunal is correct in law in holding that disputing the central excise duty and sales tax liabilities would not mean that they had become ascertained liabilities."
(2.) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is correct in law in holding that the disputed central excise duty and sales tax liabilities were contingent liabilities, not liable to be deducted while computing the capital of the assessee under the Companies (Profits) Surtax Act, 1964 ?" 2. In our view, the questions are not happily framed. The following question, in our view, will bring out the real controversy and we reframe the questions accordingly. "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the disputed central excise duty and sales tax liabilities are not liable to be deducted while computing the capital base of the assessee company under the Companies (Profits) Surtax Act, 1964."
(3.) The facts leading to this reference are that, while computing the capital base for the purpose of surtax, the Assessing Officer deducted the liability arising out of the demands made by the Central Excise Department and Sales Tax Department amounting to Rs. 1,30,566 and Rs. 5,11,374, respectively. According to the Surtax Officer, these liabilities were ascertained liabilities in view of the principles laid down by the Supreme Court in Vazir Sultan Tobacco Co. Ltd. v. CIT [1981] 132 ITR 559.;