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Commissioner Of Income-Tax,Bombay ... vs The Century Spinning And Manufacturing ... on 8 October, 1953

4. After stating the facts of Century Company's case, it was observed : "It was on these facts that their Lordships of the Supreme Court held that the assessee had not created a 'reserve' within the meaning of the Second Schedule of the Business Profits Tax Act. One fact which emerges out and has considerable significance is that in the case of Century Spinning and Manufacturing Co. Ltd., the proposed dividend was only earmarked for distribution. In the case before us, the proposed dividend has not only been earmarked but kept apart, kept back, stored up or relied upon for future use or advantage, as would be apparent from the profit and loss account and the balance-sheet of the company. If the amount had been only earmarked for distribution as dividend, then the judgment of their Lordships of the Supreme Court would have prevailed. In the instant case before us, the proposed dividend has been earmarked and set apart by a definite volition by the requisite authority who had indicated the manner of the disposal or the destination. Therefore, the facts of the case before us take out a distinct and different shape from the facts which were there before their Lordships of the Supreme Court. If the assessee had only earmarked for distribution the proposed dividends the assessee would have failed, but what the assessee has done is that he has not only earmarked but kept back or set back or set apart or stored up by a definite act as indicated by the profit and loss account and the balance-sheet.
Supreme Court of India Cites 12 - Cited by 105 - G Hasan - Full Document

Commissioner Of Income-Tax vs Indian Steel Rolling Mills Ltd. on 4 May, 1973

Madras High Court Cites 17 - Cited by 23 - V Ramaswami - Full Document

Commissioner Of Income-Tax, Gujarat-I vs Chunilal Khushaldas on 17 March, 1972

Gujarat High Court Cites 17 - Cited by 26 - P N Bhagwati - Full Document
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