JUDGMENT
T.D. Sugla, J.
1. In this departmental reference relating to the assessee’s for the assessment years 1972-73, 1973-74 and 1974-75, the Income-tax Appellate Tribunal has referred to this court the following two questions of law under section 256(1) of the Income-tax Act, 1961 :
“1. Whether, on the facts and in the circumstance of the case, the Tribunal rightly held that the excess provision for taxation over and above the actual tax liability constituted a ‘reserve’ and was includible in capital computation ?”
2. Whether, on the facts and in the circumstances of the case, Appellate Tribunal was right in directing the Surtax Officer to include in the computation of capital for the three years the entire balance in the general reserve account as standing on the first day of accounting year without therefrom the dividend declared in the relevant previous year ?”
2. Counsel are agreed that in view of our court’s judgment in CIT v. Hindustan Lever Ltd. [1986] 160 ITR 700 and CIT v. Pfizer Ltd. [1989] 177 ITR 140, the first question requires to be answered in the affirmative and in favour of the assessee. It may be mentioned that the decision were delivered by our court following the Supreme Court decision in were delivered by our court following the Supreme Court decision in Vazir Sultan Tobacco Co. Ltd. v. CIT .
3. Counsel are also agreed that in view of the Supreme Court decision in Vazir Sultan Tobacco Co. Ltd. v. CIT , the second question requires to be answered in the negative and in favour of the Revenue. The questions are so answered.
4. No order as to costs.