COMMISSIONER OF INCOME TAX Vs. SHARPEDGE LTD.

JUDGEMENT

(1.) THESE four references involve identical issues and are therefore taken up for disposal together. At the instance of Revenue, following question has been referred for opinion pursuant to the direction of this Court under s. 18 of the Companies (Profits) Surtax Act, 1964 (in short the 'Act') r/w s. 256(2) of the IT Act, 1961 (in short the 'IT Act'), by the IT Appellate Tribunal, Delhi Bench 'B' (in short the 'Tribunal') : "Whether the Tribunal was correct in law and on facts in holding that the amount of development rebate reserve written back to the general reserve was to be considered as forming part of the capital base of the company for computing its capital under the Second Schedule to the Companies '(Profits) Surtax Act, 1964 - The dispute relates to the asst. yrs. 1976 -77 to 1979 -80.

(2.) ASSESSEE , a public limited company, had written back several amounts of development rebate reserve to general reserve within the accounting periods involved. It was claimed that for computing the capital employed as per Second Schedule of the Act the said amounts were to be treated as forming part of its capital. This claim was negatived by the AO. In appeal, the CIT(A) upheld the conclusions of the AO. Assessee preferred second appeal before the Tribunal. Assessee's claim was accepted by the Tribunal with the following findings :

(3.) THOUGH a prayer for reference in terms of s. 18 r/w s. 256(1) of the IT Act was turned down, subsequently pursuant to the directions given by this Court, the question as set out above has been referred for opinion of this Court.