Vazir Sultan Tobacco Co. Ltd. Etc. Etc vs Commlssioner Of Income-Tax Andhra ... on 25 September, 1981
8. For the above reasons, we decline to answer the question referred to us and remand the matter to the taxing authority through the Tribunal to determine, applying the principles enunciated by the Supreme Court in Vazir Sultan Tobacco Co. Ltd. v. CIT , whether the amounts credited to this account during the accounting year relevant to the assessment year was arrived at on a scientific basis, i.e., by actuarial valuation or was it an ad hoc amount and, if so, what part of these amounts credited to the said account during the relevant assessment years should be included in the capital base of the company for the purpose of surtax. It is evident that, while carrying out this direction, the taxing authority shall also have regard to the direction of the Supreme Court with respect to the assessment year 1963-64 and shall take into account the amounts, if any, which are found entitled to be credited as reserves for the said assessment year 1963-64 and for the subsequent years, if any.