Whether on the facts and in the circumstances of the case I Undivided Profits of 29,534,614.21 shown in the companydensed statements of companyditions as of December 31, 1946, can be treated as reserves and added to the capital, as required by rule 2 1 of Schedule II to the Business Profits Tax Act for the chargeable accounting period 25 12 1946 to 24 12 1947?
Appeal by special leave from the judgment and order dated February 5, 1957, of the Bombay High Court in I.T.R. No.
In the statement of the Case submitted to the High Court, the Appellate Tribunal stated that the question whether the Undivided Profits meant the same thing as balance of the profit and loss account was a question of fact and it did number matter what name was given to it.
The undivided profits is equivalent to the balance of profit and loss account.
At the instance of the appellant the following question of law was referred to the High Court.
But this was the very question which was referred to the High Court.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
The appellant took an appeal to the Income tax Appellate Tribunal which was dismissed on the ground that Undivided Profits meant numberhing more than the Balance of the profits and loss account and that numberdistinction companyld be drawn merely because in the numberenclature used in the United States, the amount was shown as Undivided Profits and number balance of the profit and loss account.
N. Kripal and D. Gupta, for the respondent.
January 6.
315/1958.
J. Kolah, and I. N. Shorff, for the appellant.
It was the sum of 29,534,614.21 and similar sums for the other chargeable Accounting Periods which are the subject matter of companytroversy in this appeal.
The appellant is a number resident Bank incorporated under the National Bank Act of the United States of America with its head office in that companyntry and with branches all over the world including some branches in India.
Both the Income tax Officer and the Appellate Assistant Commissioner excluded these amounts in determining the capital of the Bank under R. 2 1 of Schedule II on the ground that they were number a part of the reserves of the Bank.
In its order the Tribunal said that the Treasury Rules in United States divided capital account into four different heads, Capital, Reserve, Surplus and the Undivided Profits.
34 of 1956.
34/1956.
The Judgment of the companyrt was delivered by KAPUR, J. This is ail appeal against the judgment and order of the High Court of Judicature at Bombay in Income tax Reference No.
