By adjustment entries the Capital paid in Surplus account was reduced to 117,561,317 and throughout the period of three years to which these appeals relate, in the balance sheets of the assessee companypany, the Capital paid in Surplus stood unchanged at the figure.
The Income tax Officer disallowed the claim of the assessee Company for inclusion of the accounts Capital paid in Surplus and Earned Surplus in the companyputation of taxable capital under Sch.
It was incorporated in the State of Delaware in the United states of America with the object of taking over the assets of two companypanies Socony Vacuum Oil Company and Standard Oil Company New Jersey .
At the end of 1945, the balance of Earned surplus was 29,557,597 and by the end of 1948 the account stood at 73,766,592.
The capital of the assessee companypany was 10,000,000 divided into 100,000 shares of the value of 100 each.
The High Court recorded answers in the affirmative on all the questions.
The Commissioner of Income tax has appealed to this Court with special leave.
The serial bonds issued to the Socony Vacuum Oil Company were later redeemed.
The identity of the amount remaining on hand at the foot of the profit loss account was number preserved.
The assessee Company is a number resident.
