JUDGMENT
T.D. Sugla, J.
1. In this departmental reference relating to the assessee’s assessment for the asst. yr. 1971-72, the Tribunal has referred to this Court the following three questions of law under s. 256(1) of the IT Act, 1961 :
“1. Whether on the facts and in the circumstances of the case, the Tribunal erred in holding that the excess provision for taxation out of the ‘Provision for taxation’ will satisfy the test of ‘Other Reserves’ and in directing the Surtax Officer to include such excess provision for computation of the capital base ?
2. Whether on the facts and in the circumstances of the case, the Tribunal erred in holding that the amount of Rs. 4,80,689 of the provision for proposed Dividend was includible in the capital computation, being “Other Reserves” ?
3. Whether on the facts and in the circumstances of the case, the Tribunal was justified in holding that the capital base should not be reduced proportionately with reference to deductions allowed under Chapter VIA of the IT Act, applying the provisions of r. 4 of Second Schedule to the Companies (Profits) Surtax Act, 1964 ?”
2. The counsel are agreed that in view of our Court’s judgment in the case of CIT vs. Pfizer Ltd. (1989) 177 ITR 140 (Bom) the first question requires to be answered in the negative and in favour of the assessee.
The counsel are also agreed that in view of the Supreme Court judgment in the case of Vazir Sultan Tobacco Co. Ltd. vs. CIT , the second question is to be answered in the affirmative and in favour of the Revenue. There is also an agreement between the parties as regards question No. 3. In view of our Court’s judgment in the case of CIT vs. Century Spg. & Mfg. Co. Ltd. (1978) 111 ITR 6 (Bom) and the Supreme Court decision in the case of Second ITO & Anr. vs. Stumpp Schuele and Somappa P. Ltd. , we answer the third question in the affirmative and in favour of the assessee. The questions are so answered.
3. No order as to costs.