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NRI legal services https://lexlords.com/nri-legal-services-in-chandigarh/. It remained on the 1st of April as a mass of undistributed profits which were available for distribution and not ear-marked as "reserve". On the other hand, on the 28th February, 1946, the directors clearly ear-marked it for distribution as dividend and did not choose to make it a reserve. 5,08,637 could not be called a "reserve", for nobody possessed of the requisite authority had indicated on that date the manner of its disposal or destination.

Nor did the company in its meeting on the 3rd April, 1946, decide that it was a reserve. 5,08,537 as dividends. " The directors had no power to distribute the sum as dividend. answered it in the negative, as a result of which the judgment of Satyanarayana Rao J. Delhi Cloth (1965) 1 SCR 900, that the expression in the manufacture of goods would normally encompass the entire process carried on by the dealer of converting raw materials into finished products. -These three appeals arise from the judgment and order of the Madras High Court dated 2nd February, 1950, delivered on a reference by the Income-tax Appellate Tribunal (hereinafter referred to as 'The Tribunal'), whereby the High Court answered the first referred question in, the negative, and as regards the second question, Satyanarayana Rao J.

It is, therefore, not correct to say that the amount was kept back. Therefore, giving to the 'reserves' its plain natural meaning, it is clear that the sum of Rs. Far from showing that the directors had made the amount in question a reserve, it shows that they had decided to ear-mark it for distribution as dividend. They did not choose to do so and have kept back this amount. The fact that it constituted a mass of undistributed profits on the 1st January, 1946, cannot automatically make it a reserve.

A reserve in the sense in which it is used in rule 2 can only mean profit earned by a company and not distributed as dividend to the shareholders but kept back by the directors for any purpose to which it may be put in future. Therefore, by keeping back this amount they constituted it a reserve. On the 1st of January, 1946, the amount was simply brought from 209 the profit and loss account to the next year and nobody with any authority on that date made or declared a reserve.

The Judgment of the Court was delivered by GHULAM HASAN J. The reserve may be a general reserve or a specific reserve, but there must be a clear indication to show whether it was a reserve either of the one or the other kind. In the basic judgment which has been referred to in every excise case for conceptual clarity, namely, Union of India v. The recommendation was accepted and the dividend was actually distributed. 92 of the Civil Procedure Code alleging that the defendant had been guilty of misconduct and breach of trust as Mahant and praying, inter alia, that the temple and properties in suit be declared as a religious and charitable trust and the defendant be removed from the Gadi and a suitable successor appointed in his place, the District Judge and the High Court held concurrently that the defendant was not guilty of misconduct or breach of trust and dismissed the suit, but made a declaration to the effect that the temple and properties in the possession of defend- ant belonged to a public trust of a religious and charitable character: They relate to the assessment for 1942-1943 and are filed by the Commissioner of Income- tax, while Appeal No.

" What is the true nature and character of the disputed sum, must be determined with reference to the substance of the matter and when this is borne in mind, it follows that on the 1st of April, 1946, which is the crucial date, the sum of Rs. , when purchased by the appellant for use in the manufacture of vehicles, could be said to be inputs. 132 of 1952 which relates to 1943- 1944 is filed by the assessee, and, is dealt with separately. They could only recommend, as indeed they did, and it was up to the shareholders of the company to accept that recommendation in which case alone the distribution could take place.

answered it in the affirmative, while Viswanatha Sastri J. On the 1st April, 1946, which is the NRI legal services (a cool way to improve) commencement of the chargeable accounting period, there was merely a recommendation, by the directors that the amount in question should be distributed as dividend. Therefore, it satisfied all the requirements of rule 2. The precise question before this Court was whether products finished in themselves, such as tyres, tubes, batteries, etc. The High Court appear to have been under a misapprehension as to the real position, for they observed :-"It was open to the directors to distribute the sum of Rs.

The nature of the amount which was nothing more than the undistributed profits of the company, remained unaltered. Thus the profits lying unutilized and not 210 specially set a part for any purpose on the crucial date did not constitute reserves within the meaning of' Schedule II, rule 2 (1). 5,08,637 was kept in reserve by the company and not distributed as profits and subjected to taxation. This Court held that as a vehicle cannot be operative without tyres, tubes, and batteries, obviously they were inputs in the sense of the dictionary meaning of what is put in.

By the resolution of the shareholders on the 3rd April, 1946, the amount was shortly afterwards distributed as dividend.