CARBORANDUM UNIVERSAL LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a combined reference both at the instance of the Revenue as well as the assessee and the Tribunal, at the instance of both the assessee and the Revenue, has drawn up a consolidated statement of case and referred the following questions of law under s. 256(1) of the IT Act, 1961, for our opinion. The question of law at the instance of assessee :

(2.) IN so far as the question referred to at the instance of the assessee is concerned, the point that arises is whether the assessee would be entitled to deduction of surtax paid by the assessee in computing the total income for the asst. yr. 1973-74. A similar question whether the surtax paid by a company is deductible in computation of the company's business income came up for consideration before the Supreme Court in the case of Smith Kline & French (I) Ltd. vs. CIT and the apex Court in that case held that the surtax levied on the company's profit cannot be allowed as deduction while computing the business income of the assessee as per the provisions of the IT Act, 1961. Following the said decision of the apex Court, we answer the question of law referred to us at the instance of the assessee in the affirmative and against the assessee.