COMMISSIONER OF INCOME TAX Vs. GOKAK MILLS LIMITED

JUDGEMENT

(1.) IN this reference the question referred to the High Court under s. 256(1) of the I.T. Act, 1961, is as follows :

(2.) THE question very briefly paraphrased would be whether the four amounts or funds were reserves and liable to be included in the computation of the capital of the company. As far as items (a) and (d) are concerned, the question would seem to be concluded by decisions of the Bombay High Court, and we propose to answer them in accordance with the said decisions. As far as items (b) and (c) are concerned, the principles now are well settled (as far as the Bombay High Court is concerned), and the application of the principles presents very little difficulty in the instant case. Thus, an elaborate recital of the facts or statement of law appears to be unnecessary.

(3.) THIS question has been duly considered in CIT v. Forbes Forbes Campbell and Co. Ltd. : [1977]107ITR38(Bom) . It has been observed by Tulzapurkar J., speaking for the Bench of this High Court, as follows (p. 44) :