COMMISSIONER OF INCOME TAX Vs. RASHTRIYA METAL INDUSTRIES

JUDGEMENT

(1.) THE question that arises in this reference reads thus :

(2.) IN view of the Supreme Court decision in Vazir Sultan Tobacco Co. Ltd. vs. CIT (1981) 132 ITR 559 (SC), it is only the excess of provision for taxation or gratuity reserve over actual liability which requires to be treated as reserves for the purpose of capital computation. However, the relevant material required for the purpose is not available on record. In the circumstances, we have to direct the Tribunal to determine the excess of the provisions over liabilities in respect of both these items in the light of the principles enunciated in the aforesaid decision and treat the excess, if any, only, as reserves for the purpose of capital computation. The order is accordingly made. No order as to costs.