| Case ID |
3cc9edab-dcdf-44b5-982c-9742fac64550 |
| Body |
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| Case Number |
IT REFERENCE No. 132 OF 1977 |
| Decision Date |
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| Hearing Date |
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| Decision |
The Tribunal upheld the rectification order under Section 13 of the Companies (Profits) Surtax Act, finding that the Income Tax Officer (ITO) had the jurisdiction to rectify the omission of proportionate reduction of the capital base under Rule 4. The Tribunal ruled that the omission to make such a reduction was a mistake apparent from the records. Further, the ITO's inclusion of amounts under Rule 3 was also rectified as the capital increase from bonus shares did not alter the overall capital structure, leading to a sustainable rectification of the capital base for the assessment years in question. |
| Summary |
The case revolves around the rectification of mistakes made by the Income Tax Officer in computing the capital base for surtax assessments for the years 1966-67 and 1967-68 under the Companies (Profits) Surtax Act, 1964. The primary contention was whether the profits attributable to priority industries, which were deductible under Section 80E of the Income-tax Act, should affect the capital base calculation. The Tribunal concluded that the ITO's oversight in not applying proportionate reductions was a mistake apparent from the records. The decision emphasized the importance of accurately reflecting the impact of bonus shares issued from reserves on the overall capital base. This case highlights crucial aspects of tax law, particularly in the context of capital computation and rectification processes, which are vital for tax practitioners and corporate entities alike. Keywords such as 'Companies (Profits) Surtax Act', 'Income-tax Act', 'rectification of mistakes', 'capital base', and 'priority industry deductions' are essential for SEO optimization within legal contexts. |
| Court |
Calcutta High Court
|
| Entities Involved |
|
| Judges |
Dipak Kumar Sen,
Bimal Chandra Basak
|
| Lawyers |
Dr. Debi Pal,
Pranab Pal,
Suhas Sen,
Ajit Sengupta
|
| Petitioners |
Alkali and Chemical Corporation of India Ltd.
|
| Respondents |
Commissioner of Income Tax
|
| Citations |
1980 SLD 756,
(1980) 122 ITR 490
|
| Other Citations |
T.S. Balaram, ITO v. Volkart Bros. [1971] 82 ITR 50 (SC),
Addl. CIT v. Bimetal Bearings Ltd. [1977] 110 ITR 131 (Mad.),
Harbans Lal Malhotra & Sons (P.) Ltd. v. ITO [1972] 83 ITR 848 (Cal.),
ITO v. India Foils Ltd. [1973] 91 ITR 72 (Cal.),
ITO v. Raleigh Investment Co. Ltd. [1976] 102 ITR 616 (Cal.),
Second ITO v. Stumpp, Schuele & Somappa (P.) Ltd. [1977] 106 ITR 399 (Kar.),
Maharana Mills (P.) Ltd. v. ITO [1959] 36 ITR 350 (SC)
|
| Laws Involved |
Companies (Profits) Surtax Act, 1964,
Income-tax Act, 1961
|
| Sections |
13,
80E
|