| Case ID |
3910c501-4a48-43fb-97ac-060ce57220b7 |
| Body |
View case body. Login to View |
| Case Number |
Civil Appeals Nos. 1513 to 1516 of 1977 |
| Decision Date |
Jan 24, 1995 |
| Hearing Date |
|
| Decision |
The Supreme Court of India dismissed the appeals filed by the Commissioner of Income Tax against the decision of the Gujarat High Court, which affirmed that the loan taken by New India Industries Ltd. qualified for inclusion in the computation of capital for surtax under the Companies (Profits) Surtax Act, 1964. The Court held that the modification of the loan agreement, which extended the repayment period to eight years, did not invalidate the loan's inclusion within the capital computation as it was still repayable during a period of not less than seven years. The findings of the High Court were deemed correct, as the terms of the agreement and its subsequent modifications were consistent with the legislative provisions. |
| Summary |
The case revolves around the interpretation of the Companies (Profits) Surtax Act, specifically concerning the inclusion of a loan in the capital computation for surtax purposes. The Supreme Court of India upheld the Gujarat High Court's ruling that modifications made to a loan agreement, allowing for repayment beyond the initial seven-year period, still permitted the loan's inclusion in capital calculations. The case highlights the importance of agreement terms and legislative provisions in tax matters, particularly under the Income Tax Act and the Companies (Profits) Surtax Act. Key legal principles established in this decision emphasize the flexibility of repayment terms and the conditions for capital computation in corporate tax assessments. This ruling serves as an important precedent for similar tax-related cases and reinforces the need for clarity in financial agreements. |
| Court |
Supreme Court of India
|
| Entities Involved |
COMMISSIONER OF INCOME TAX,
NEW INDIA INDUSTRIES LTD
|
| Judges |
J. S. Verma,
S. P. Bharucha,
K. S. Paripoornan
|
| Lawyers |
G. Viswanatha Iyer, Senior Advocate,
K.P. Bhatnagar,
S.N. Terdol,
Joseph Vellapally, Senior Advocate,
Punit Tyagi, Advocate (of J.B. Dadachanji & Co.)
|
| Petitioners |
COMMISSIONER OF INCOME TAX
|
| Respondents |
NEW INDIA INDUSTRIES LTD
|
| Citations |
1996 SLD 114,
1996 PTD 572,
(1995) 212 ITR 653,
(1995) 73 TAX 54
|
| Other Citations |
New India Industries Ltd. v. C.I.T. (1977) 108 ITR 181
|
| Laws Involved |
Income Tax Act, 1922,
Companies (Profits) Surtax Act, 1964
|
| Sections |
Schedule II, Rule 1(v)
|