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1 - 9 of 9 (0.19 seconds)Commissioner Of Income-Tax vs National Rayon Corporation Ltd. on 24 August, 1984
Accordingly, following our judgment in the assessee's own case in CIT v. National Rayon Corporation Ltd. [1986] 160 ITR 716, we would hold that the debenture redemption reserve is not a reserve and answer the second question in the negative and in favour of the Revenue. We will also answer the third question in the negative and in favour of the Revenue subject only to this that when the matter goes back to the Tribunal for passing an order in accordance with the judgment of this court, the Tribunal will consider whether the gratuity reserve of Rs. 17 lakhs is in excess of the assessee's actual gratuity liability on actuarial basis and the excess, if any, will be treated as reserve."
Mental Box Co. Of India Ltd vs Their Workmen on 20 August, 1968
In its decision in Vazir Sultan Tobacco Co. of India Ltd.'s case [1981] 132 ITR 559, also the Supreme Court examined the meaning of 'reserve', inter alia, in the context of the dividend.
Commissioner Of Income-Tax vs Modi Industries Ltd. on 29 May, 1992
In CIT v. Modi Industries Ltd. (No. 2) [1992] 197 ITR 655 (Delhi) in a case where the assessee which had issued two sets of debentures created, by appropriation of profits from profit and loss appropriation account, a reserve called the "Debenture Redemption Fund", there was no liability of the current year which had to be met by those funds in redeeming debentures, in that year, and the funds had been set apart for use only in future, the Delhi High Court held that, "the debenture redemption fund was a 'reserve' and had to be included in the capital base for the purpose of the Companies (Profits) Surtax Act, 1964".
Commissioner Of Income-Tax vs Peico Electronics & Electricals ... on 18 July, 1986
In CIT v. Peico Electronics and Electricals (formerly Philips India Ltd.) [1987] 166 ITR 299, the Calcutta High Court held that, "the debenture redemption reserve in the instant case fulfilled the test of a reserve because (a) the reserve had been created out of appropriation from profits and not by way of a charge on the revenue; (b) the fund had been retained to form part of the capital employed in the business, i.e., it had not been invested in securities or otherwise so as to take it out of the business; (c) none of the debentures became redeemable during the accounting period. The liability to redeem the debentures was a future liability; and (d) the debentures had been separately shown in the balance-sheet as a liability. The debenture redemption reserve had not been converted into a sinking fund by investment. Therefore, the Tribunal was right in holding that the debentures redemption fund could not be excluded in computing the capital of the assessee for the purpose of surtax."
Commissioner Of Income-Tax, U.P vs Laxmi Sugar & Oil Mills Ltd on 16 July, 1986
"We have gone through the above three decisions of the Supreme Court as well as the Calcutta and Karnataka High Courts' decisions relied on by Shri Mehta carefully. No doubt, there is an observation in the Supreme Court decisions that a provision is a charge against profits. It is, however, seen that in CIT v. Laxmi Sugar and Oil Mills Ltd. [1986] 161 ITR 168, the Supreme Court referred to its earlier decision in Vazir Sultan Tobacco Co. Ltd.'s case [1981] 132 ITR 559.
Commissioner Of Income-Tax vs Sijua (Jharriah) Electric Supply Co. ... on 30 June, 1983
In CIT v. Sijua (Jheriah) Electric Supply Co. Ltd. , while considering the provisions of the Companies (Profits) Surtax Act, 1964, Schedule II, the Calcutta High Court held that : "where a debenture redemption reserve was created out of the profits of the company and the payment to the debenture-holders on account of principal and interest was made out of funds other than the debenture redemption reserve account and an amount equal to the cash applied in redeeming the debentures was transferred from the profit and loss account to the capital redemption reserve fund in order to conserve working capital, i.e., to prevent reduction of capital, in such a case, the debenture redemption reserve is a reserve and not a provision and is to be taken into account for computing capital for purposes of surtax under Schedule II of the Companies (Profits) Surtax Act, 1964."
Section 256 in The Income Tax Act, 1961 [Entire Act]
Commissioner Of Income Tax, Kanpur vs The Elgin Mills Ltd., Kanpur on 31 July, 1986
In CIT v. Elgin Mills Ltd. [1986] 161 ITR 733, the Supreme Court held that, "the distinction between 'provision' and 'reserve' is that while 'provision' is a charge on profits which are taken into account in the gross receipts of the profit and loss account, 'reserve' is an appropriation of profit to provide for the asset which it represented".
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