COMMISSIONER OF INCOME TAX Vs. TATA CHEMICALS LIMITED

JUDGEMENT

(1.) THIS reference raises only one question of law at the instance of the Department. The question reads thus :

(2.) COUNSEL are agreed that in view of the Supreme Court's decision in the case of Vazir Sultan Tobacco Co. Ltd. vs. CIT (1981) 125 CTR (SC) 186 : (1981) 132 ITR 559 (SC), our answer has to be in the negative and in favour of the Revenue regarding the question pertaining to the dividend reserve. As regards the question pertaining to the gratuity reserve, counsel are agreed that in view of this Court's decision in the case of Goodlass Nerolac Paints Ltd. vs. CIT (1984) 41 CTR (Bom) 172 : (1984) 150 ITR 484 (Bom), the question is required to be answered thus : The Tribunal shall determine the excess, if any, over the known or determinate liability of the assessee in respect of the gratuity and such excess only will be treated as reserve for the purpose of capital computation.

(3.) NO order as to costs.