( 1 ) INCOME-TAX Appellate Tribunal, Allahabad, has, at the instance of the Commissioner of income-tax, in respect of the assessment of the assessee, M/s. J. K. Synthetics Ltd. , Kanpur, under Section 62 of the Companies (Profits) Surtax Act, 1964 (hereinafter referred to as " the act "), for the assessment years 1967-68 and 1968-69, referred the following question of law for the opinion of this court:

"whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the amount of relief allowed to the assessee under Section 80j of the Income-tax Act was not income not includible in the total income of the assessee within the meaning of Rule 4 of the second Schedule to the Companies (Profits) Surtax Act, 1964?"

( 2 ) THE assessee is a company. For the assessment years 1967-68 and 1968-69, it was allowed deduction under Section 80j of the I. T. Act, 1961. While computing its capital for the purposes of surtax under the Act, the ITO held that the assessees capital was liable to be reduced proportionately as per Rule 4 of Schedule II to the Act in view of the relief allowed to the assessee under Section 80j of the I. T. Act. Aggrieved,