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 Appellate Tribunal was right in holding that goodwill amounting to Rs. 39,63,686 written off in 1956, investment reserve amounting to Rs. 16 lakhs written off in 1961 and investments totalling Rs. 20 lakhs written off in the year 1957 to 1961 which did not appear in the balance-sheets of the years immediately preceding the previous years corresponding to the relevant assessment years could not be included in the capital computation for the purpose of working out the liability under the Super Profits Tax Act, 1963, and the Companies (Profits) Surtax Act, 1964 ? "
(2.) We may mention that before us no argument regarding investment reserve amounting to Rs. 16 lakhs written off and investments totalling Rs. 20 lakhs written off in the years 1957 to 1961 which did not appear in the balance-sheets for the previous years was placed and as such we did not have the advantage of considering the submissions on behalf of the parties in respect of the same. We, therefore, decline to deal with these aspects and would not answer the question relating to these two items.
(3.) The assessee is a limited company and this reference relates to the assessment years 1963-64, 1964-65 and 1965-66. The assessee claimed before the ITO that in working out the super profits tax liability for the assessment year 1963-64 and the surtax liability for the assessment years 1964-65 and 1965-66, the goodwill amounting to Rs. 39,63,686, written off in the accounts for the year ending on 31st December, 1956, should be included in the capital computation. The ITO, however, did not accept the claim of the assessee-company. It would be relevant to refer to certain portions of the order of the ITO, wherein he, dealing with those two items, inter alia, observed as follows: " The balance-sheet of the company for the year does not show the existence of such reserves. There is no provision in the Act for considering such items as reserves for the purpose of computation of capital. The assessee's contention, that these amounts are to be included in the computation of capital, as other reserves, is, therefore, rejected.";