- (1.) THE matter here pertains to the framing of surtax assessment under the Companies (Profits) Surtax Act, 1964.
(2.) THE questions of law referred for the opinion of this court in this behalf being : " (1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal erred in law in holding that the following amounts should be taken into consideration in the computation of the capital employed for the purpose of statutory deduction under the Second Schedule to the Companies (Profits) Surtax Act, 1964 : 1975-76 1976-77 Rs. Rs. Reserve for bonus 12,76,76 7,18, 2 662 Reserve for doubtful 62,710 debts 62,71 0 (2) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal erred in law in affirming the order of the Appellate Assistant Commissioner holding that deductions allowed under Sections 80g and 80m falling under Chapter VI-A of the Income-tax Act, 1961, could not be considered as sums 'not includible' in the total income for income-tax assessment and, therefore, would not fall for deduction under Rule 4 of the Second Schedule to the Companies (Profits) Surtax Act, 1964, for the purpose of computing the capital employed ?"
(3.) BOTH the questions referred have to be answered in the negative, in favour of the assessee and against the Revenue keeping in view the earlier judgment of this court in Income-tax Reference No. 66 of 1980 (CIT v. Saraswati Industrial Syndicate Ltd. (No. 4) [1989] 178 ITR 479), decided on November 25, 1988, where similar questions were raised concerning the same assessee.;