JUDGMENT

Mrs. Sujata V. Manohar, J.-This is an appeal from a decision of the Calcutta High Court in a Reference made to it under Section 256(1) of the Income-tax Act, 1961.

2. The assessee is a company and the accounting years involved are the years ending on 31.12.1962 and 31.12.1963 relevant to the assessment years 1963-64 and 1964-65 respectively.

3. For the assessment year 1963-64, the assessee claimed that for the purposes of Super Profits Tax Act, 1963, in the computation of its capital, a provision for taxation made by it to the tune of Rs. 16,48,888/- should be treated either as a part of its capital under Rule 1 of the Second Schedule to the Super Profits Act, 1963 or in the alternative as a deduction from the cost of investment under Clause (ii) of Rule 1 of the Second Schedule to the Super Profits Tax Act, 1963.

4. For the assessment year 1964-65, the assessee made a similar claim in respect of a provision for taxation made by it to the tune of Rs. 17,52,920/-. For this assessment year the relevant provisions which were applicable were under the Companies (Profits) Surtax Act, 1964.

5. The claim of the assessee was disallowed by the Income-tax Officer. In appeal before the