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Commissioner of Income Tax Vs. Heckett Engineering Company (India Branch), Jamshedpur - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtSupreme Court of India
Decided On
Judge
Reported in[1984]145ITR514(SC); 1984(Supp)SCC681
AppellantCommissioner of Income Tax
RespondentHeckett Engineering Company (India Branch), Jamshedpur
Excerpt:
.....- reserves - section 2 (10) of super profit tax act, 1963 - 'retained income' and 'unmerited foreign income' shown in balance sheet of company - apex court after perusing evidence on record and in conformity with its earlier judgment held that both entries in balance sheet are 'reserves'. - [a.k. sarkar,; k. subba rao and; jafer imam, jj.] the respondents entered into three several contracts with the appellant, for the fabrication and supply of diverse military stores, each of which contracts contained an arbitration clause. before the contracts had been fully executed disputes arose between the parties, one alleging that the other was committing a breach of the contract. the parties then entered into three fresh contracts on successive dates purporting to settle these disputes..........sought to make a distinction between two nomenclatures ' retained earnings ' and ' unmeritedforeign income '. the amounts represented by both these expressions as appearing in the balance-sheet have been held to be 'reserves' by the appellate assistant commissioner, the tribunal and the high court. but counsel urged that there was no material to show the exact nature or character of the amounts described as ' unremitted foreign income ' or that they had the same character as ' retained earnings '. counsel submitted that perhaps these amounts were those which had not been remitted by the branches in foreign countries other than indian branch to the head office in the united states of america.3. after going through the order of the tribunal as well as of the high court it is very.....
Judgment:

V.D. Tulzapurkar, J.

1. After hearing counsel for the Revenue as well as for the assessee, we are satisfied that the question raised in this appeal is covered by a decision of this Court in Standard Vacuum Oil Company's case : [1966]59ITR685(SC) .

2. Counsel for the Revenue, however, sought to make a distinction between two nomenclatures ' retained earnings ' and ' unmeritedforeign income '. The amounts represented by both these expressions as appearing in the balance-sheet have been held to be 'reserves' by the Appellate Assistant Commissioner, the Tribunal and the High Court. But counsel urged that there was no material to show the exact nature or character of the amounts described as ' unremitted foreign income ' or that they had the same character as ' retained earnings '. Counsel submitted that perhaps these amounts were those which had not been remitted by the branches in foreign countries other than Indian branch to the head office in the United States of America.

3. After going through the order of the Tribunal as well as of the High Court it is very clear that the submission of counsel is ill conceived and that both the expressions are used in one and the same sense and the amounts described in either way have the same character. In fact, the Tribunal has observed that it was not disputed before it that the nature of both the items was one and the same. The appeal, therefore, is dismissed with no order as to costs.


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