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Documents citing Commissioner Of Income-Tax/Super ... vs Indian Standard Wagon Co. Ltd. on 17 February, 1978

Commissioner Of Income-Tax vs Calcutta Electric Supply Corporation ... on 2 March, 1981

Reliance in this connection was placed on the observations of the Division Bench of this court in the case of CIT v. Indian Standard Wagon Co. Ltd. [1979] 118 ITR 623. We also agree with this proposition. The amount of contingency reserve, according to the Revenue, is not available to the assessee for any purpose of his own or even for any other purpose than those indicated in para. V of Schedule VI to the Electricity (Supply) Act, 1948. It was urged on behalf of the Revenue that the assessee-company had stated that no portion of the said fund could be used without the prior approval of the State Govt. The amount of the reserve had to be invested in securities authorised under the Indian Trusts Act, 1882. According to the Revenue, para. V of Schedule VI to the Electricity (Supply) Act, 1948, provided that the contingencies reserve should not be drawn upon save in exceptional circumstances and that too with the prior approval of the government during the currency of the licence. It was, therefore, urged that the amount was not one which was at the disposal of the assessee in the matter of its application. Since the amount was not available to the assessee for the purpose of its business it was not a reserve under Schedule II to the S.P.T. Act, 1963. It was also apparent from the surrounding circumstances, according to the Revenue, that the amount so set apart is not a reserve to be utilised in future for any specific purpose on any specific occasion.
Calcutta High Court Cites 32 - Cited by 18 - S Mukharji - Full Document

Commissioner Of Income-Tax vs Karam Chand Thapar And Brothers on 15 May, 1980

25. In view of the language used in the Explanation which, inter alia, provides that " ...any amount standing to the credit of any account in the books of a company as on the first day of the previous year relevant to the assessment year which is of the nature of item (5) or item (6) or item (7) under the heading ' Reserves and Surplus ' or of any item under the heading ' Current Liabilities and Provisions ' in the column relating to 'liabilities' in the 'form of balance-sheet' given in Part I of Schedule VI to the Companies Act, 1956 (1 of 1956), shall not be regarded as a ' reserve ' for the purposes of computation of the capital of a company under the provisions of this Schedule". We are of the opinion that in so far as we expressed the view about the current liabilities, the expression of our views in the case of CIT v. Indian Standard Wagon Co. Ltd. was perhaps too widely stated. Explanation is dealing with the nature of item (5) or item (6) or item (7) under the heading "Reserves and Surplus" or of any item, that is to say, all the items under the heading "Current Liabilities and Provisions". But even apart from that Explanation, we have held in that case that the items considered in the decision could not be considered to be anything but reserves. There is a provision in the appendix to the Companies Act providing as to how the balance-sheet should be construed and it was contended that with the aid of interpretation, in any event, a provision for depreciation for investment allowances could not be considered to be reserve. It is true that the interpretation clause is an aid to the construction, but the provision for depreciation, that had been made, was in the context of the facts and circumstances of the case.
Calcutta High Court Cites 25 - Cited by 5 - S Mukharji - Full Document

Commissioner Of Income-Tax, Central vs Shalimar Tar Products (1935) Ltd. on 6 May, 1980

It was held in the case of CIT v. Indian Standard Wagon Co. Ltd. that any item which cannot be ascertained with any substantial accuracy, either by following any normal method of accounting, actuarial or otherwise, cannot be considered to be a contingent liability which merits exclusion from being considered as reserve in the context of Rule 1 of the Second Schedule to the Act. This aspect is important even if one considers the question of "reserve" in contradistinction to "provision" in the accountancy principle.
Calcutta High Court Cites 18 - Cited by 3 - S Mukharji - Full Document

Addl. Commissioner Of Income-Tax, ... vs Minerals & Metals Trading Corporation ... on 15 May, 1981

20. Shri Desai also invited our attention to the decision of the Calcutta High Court in CIT v. Indian Standard Wagon Co. Ltd. [1979] 116 ITR 539. At p. 543, it was pointed out that the item in question with which the court was concerned did not fall under any of the heads mentioned in the sub-heading "A" under "Current liabilities". It was pointed out that in the form of balance-sheet "Current liabilities" and "Provisions" were separately treated, the former being classified under the sub-heading "A" and "provisions" being classified separately under the sub-heading "B". The court then proceeded to observe that what is excluded by the Explanation from being treated as reserve is not anything which is included in the sub-heading "Provision" but only those items which are included under the heading "Current liabilities". It was, therefore, held that an amount falling under item 13 or 10 under the heading "Provisions" did not really fall for exclusion in the computation of reserve under the Explanation. Here also, if we may say so with respect, there appears to have been the same misapprehension regarding the scope of the Explanation arising out of a mix-up between the expression "liabilities" - which refers to one of the two columns of the balance-sheet-and the expression "current liabilities" which is a sub-heading under a heading falling under that column. As we read it, the Explanation takes in, for exclusion from the concept of "reserve", all items shown under either of the two headings "A" and "B" of the heading "Current Liabilities and Provisions". The reference to the column relating to "Liabilities" made a little later in the Explanation is not a reference to the heading "Current Liabilities" shown under the sub-heading "A" but to the general column of liabilities as opposed to the column relating to assets in the form of balance-sheet. Once, therefore, an item is recognised to fall under the headings "Current liabilities" or "Provisions" or is one of the stipulated items referable to the heading "Reserves and Surplus", it would certainly be liable to be excluded from being treated as reserve. We, are, therefore, unable to agree with these aspects of the two judgments relied upon by Sri Desai.
Delhi High Court Cites 11 - Cited by 4 - S Ranganathan - Full Document

Commissioner Of Income-Tax vs Shaw Wallace & Co. Ltd. on 11 September, 1986

(a) CIT v. Indian Standard Wagon Co. Ltd. . In this case, an amount was set apart in the accounts as provision for labour retiring gratuity. The question arose before a Division Bench of this court as to whether the said amount could be treated as a reserve and be included in the capital of the assessee for the purpose of the Surtax Act. It was held that as the item could not be ascertained with any substantial accuracy by following any normal method of accountancy or actuarially, the same could not be considered to be a contingent liability but should be treated as a reserve.
Calcutta High Court Cites 10 - Cited by 0 - Full Document
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