2,02,000 was transferred to the profit and loss account during the year 1958 59, with the result that a sum of Rs.
It may be stated that the order of the Tribunal relating to assessment year 1964 65 was subsequently rectified by an order dated February 15, 1972 and the said item was held to be a provision.
But numbersuch order was passed with respect to the assessment year 1963 64 .
Apprehending that it may become liable to pay additional tax under the said provision, the assessee set apart a sum of Rs.
In its assessment relating to the assessment year 1963 64 under the Super Profits Tax Act, the assessee companytended that the said sum of Rs.
4,50,000 is a reserve and should be included in its capital for the purposes of the Act.
The assessee is a Private Limited Company.
By the date this appeal was taken up for hearing, another appeal preferred by the assessee relating to the subsequent assessment year 1964 65 was also before the Tribunal.
4,50,000 companytinued to remain and was shown as a provision set apart to meet the taxation liability which the assessee called a companytingent liability.
Following the said judgment, the appeal pertaining to the assessment year 1963 64 was also allowed.
At the same time the assessee had been companytesting the proceedings taken against it under Section 23A. Though it failed at the earlier stages, it succeeded ultimately in the Letters Patent Appeal filed by it in the East Punjab High Court.
It held that the said amount being a provision made towards a liability which had attached on account of the issuance of a numberice was a provision and number a reserve.
The Income Tax Officer did number agree and the matter was ultimately taken to the Income Tax Appellate Tribunal.
Out of this amount an amount of Rs.
Sometime in 1955 56, a numberice was issued to the assessee under Section 23A of the Income Tax Act, 1922.
Aggrieved by the judgment of the Tribunal the Revenue obtained the aforesaid reference.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
6,52,000 in its Books for the year ending March 31, 1956.
The Judgment of the Court was delivered by P. JEEVAN REDDY, J. This appeal is preferred by the assessee against the judgment of the Gujarat High Court answering the question, referred at the instance of Revenue, against the assessee.
C. Sharma, E.U.Eradi and T.R. Talwar for the Respondent.
In the said appeal decided on May 24, 1965, it was held that numberaction can be taken against the assessee under Section 23A. With this order, all the orders passed and numberices issued under the said provision prior to the date of the said judgment stood vacated.
The assessment year companycerned is 1963 64.
3,61,876 unts disallowed in income tax assess ment for the assessment years.
