COMMISSIONER OF INCOME TAX/EXCESS PROFITS TAX BUSINESS PROFITS TAX Vs. PEIRCE LESLIE AND COMPANY LIMITED

JUDGEMENT

(1.) OF the three questions referred to this court under of the Act, the first two were answered against the assessee in the order of this court dated 3rd September, 1958. The answer to the third of the questions was reserved, and by the order dated 3rd September, 1958, a further statement of the case was called for from the Tribunal, which has since been submitted The entire claim of the assessee was allowed by the Tribunal, and even at the earlier stage the assessee did not dispute the fact that the entirety of its claim, though upheld by the Tribunal, could not be sustained. The claim in the proceedings put forward by the assessee before us was a much more limited one, the details of which were set out in the order dated 3rd September, 1958.

(2.) IT is the correctness of that claim we have to decide on the basis of the further statement of the case submitted by the Tribunal The first item which we have to consider is the claim of assessee, that for the first two chargeable accounting periods a sum of pound 27, 857 constituted " reserves " within the meaning of the rule, and that for the next two chargeable accounting periods the amount under this head was pound 9, 812-0-5

(3.) IN this case distribution was deferred, and that by itself with nothing more cannot make the amount so set apart a reserve within the meaning of rule 2Therefore, the assessee's claim that whatever was found in the capital profit account, whether that claim was based upon what was credited or upon what was retained as balance at the end of the relevant period, was a reserve within the meaning of rule 2 will have to be negatived. As we said, it only retained a portion of the undistributed profits only it was put under a separate head in the balance-sheet