Commissioner of Income Tax Vs Mohan Meakin Breweries Ltd.

Arijit Pasayat, C.J.

These thirteen reference applications relate to the same assessed and, Therefore, are disposed of by this common order. The assessment years involved are 1973-74 to 1979-80. At the instance of the revenue following questions for the different years (some of them are common somewhere) have been referred for opinion of this court u/s 18 of the Companies (Profits) Surtax Act, 1964 (hereinafter referred to as ''the Surtax Act'') read with section 256(1) of the Income Tax Act, 1961. By common order dated 9-1-1985 various appeals were disposed of by the Tribunal, Delhi Bench ''A''. Accepting the prayer for reference, the questions as set out hereunder, have been referred for opinion of this court :

"1. Whether, on the facts and in the circumstances of the case and on a true and correct interpretation of rule 1(viii) of the First Schedule to the Companies (Profits) Surtax Act, 1964, the Appellate Tribunal was justified in law in holding that for the assessment years in question, the assessed was entitled to the deduction of the gross amount of dividend and not the net dividend as allowed by the Surtax Officer?

2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was further justified in law in holding that the Explanation below rule 1 of the First Schedule to the said Act inserted by the Finance Act, 1981 was effective from 1-4-1981 only (relevant to the assessment year 1981-82 and thereafter).

3. Whether, on the facts and in the circumstances of the case and on a true and correct interpretation of rule 1(ix) of the First Schedule to the Companies (Profits) Surtax Act, 1964, the Appellate Tribunal was justified in law in holding that the gross amount of royalty instead of the net amount of royalty were to be excluded from the total income for arriving at the chargeable profits under the Companies (Profits) Surtax Act, 1964?

4. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in holding that section 18 of the Companies (Profits) Surtax Act, 1964, read with section 244(1 A) of the Income Tax Act, 1961 was applicable to the refund due to the assessed on regular assessment made u/s 6(2) of the Companies (Profits) Surtax Act, 1964?

5. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in holding that the refund of tax on provisional assessment u/s 7(3) of the Companies (Profits) Surtax Act, 1964 found refundable on completion of regular assessment u/s 6(2) thereof, was entitled to interest u/s 18 of the Companies (Profits) Surtax Act, 1964, read with section 244(1A) of the Income Tax Act, 1961?

6. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in holding that the excess provision on account of tax with reference to the tax liability finally determined was to be treated as a reserve?

7. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in holding that the reasonable amount of provision was to be determined with reference to the tax as finally determined and not with reference to the income returnable by the assessed?''

2. First two questions are common for the assessment years 1973-74, 1974-75, 1975-76, 1978-79 and 1979-80.

3. We need not go into the factual aspects in detail, in view of the fact that most of the questions are covered by the decisions of the Apex Court and/ or various High Courts.

4. First and third questions are covered by the decision of the Apex Court in COMMISSIONER OF INCOME TAX Vs. SUNDRAM INDUSTRIES (P) LTD., Following the views laid down in the said case, we answer the questions in the negative, in favor of the revenue and against the assessed. So far as the second question is concerned, it is covered by the decision of this court in Commissioner of Surtax Vs. Modi Industries Ltd., . The answer to the question is in the negative, in favor of the revenue and against the assessed. So far as the 4th and 5th questions are concerned, they are covered by the decision of Madras High Court in Commissioner of Income Tax Vs. Ashok Leyland Ltd., . We are in agreement with the views expressed by the High Court in the affirmative, in favor of the assessed and against the revenue. Similar is the position in respect of the 5th question. So far as the 6th and 7th questions are concerned, the Tribunal seems to have relied on the decisions of the Apex Court in Commissioner of Wealth Tax, Madras Vs. K.S.N. Bhatt, and Commissioner of Wealth-tax, Gujarat Vs. Smt. Vimlaben Vadilal Mehta, . We find that the said decisions were rendered in the context of the Wealth Tax Act, 1957 and the Gift Tax Act, 1958. The position under the said Acts is that the valuation is to be done on the last date of the valuation year, unlike the position under the Act where it is on the first day of the previous year relevant to the assessment year which is relevant for the purpose of aggregation. This position is clarified by the Apex Court, though in somewhere different context, in M/s. Karamchand Premchand Pvt. Ltd. etc., etc. Vs. The Commissioner of Income Tax, Gujarat etc., etc., . The aforesaid 6th and 7th questions referred are, accordingly, answered in the affirmative, in favor of the revenue and against the assessed.

5. All the thirteen references are accordingly disposed of.