Circular No. 364

1506. Financial institutions notified under clause (v) 1 of rule 1 for the purposes of computing capital of company

What this is

Circular No. 364 was issued by the Central Board of Direct Taxes on 15 July 1983. Its subject is 1506. Financial institutions notified under clause (v) 1 of rule 1 for the purposes of computing capital of company.

What it does

Lists the financial institutions notified by the Central Government under clause (v) of rule 1 of the Second Schedule to the Companies (Profits) Surtax Act, 1964, for computing the capital of a company. The institutions run from the Industrial Development Bank of India, all State Financial Corporations and the Madras Industrial and Investment Corporation of India Ltd. notified by S.O. 3856 dated 13 December 1965, through the Refinance Corporation for Industry Ltd. and the Life Insurance Corporation of India, various State industrial development and small industries corporations, to the Industrial Reconstruction Corporation of India Ltd. and the Pradeshiya Industrial and Investment Corporation of Uttar Pradesh Ltd. Each entry carries its notification number and date, and footnotes give the assessment year from which particular entries take effect, such as assessment year 1964-65, 1972-73 and 1973-74. A footnote records that the clause was omitted by Finance Act, 1976 with effect from 1 April 1977.

Why it was issued

To collect in one place the notifications issued under clause (v) of rule 1 of the Second Schedule, so that borrowings from the listed institutions could be identified when a company's capital was computed for surtax.

Who it reaches

Companies computing capital base under the Second Schedule for surtax
Companies with borrowings from State Financial Corporations and State industrial development corporations
Assessing Officers making surtax assessments for years up to the omission

The instrument, as the Board published it

The words below are the department’s own, reproduced from its published text. Where the department’s copy carried a publisher’s notes after the instrument, those are not reproduced.

1506. Financial institutions notified under clause (v) 1 of rule 1 for the purposes of computing capital of company
In pursuance of clause (v) of rule 1 of the Second Schedule to the Companies (Profits) Surtax Act, 1964 (7 of 1964), the Central Government has notified the following financial institutions for the purposes of the said clause :

Institutions

Notification

No.

Date

The Industrial Development Bank of India

All State Financial Corporations

The Madras Industrial & Investment Corporation of India Ltd.

SO 3856

13-12-1965

The Refinance Corporation for Industry Ltd.

The Life Insurance Corporation of India

SO 3497

28-9-1968 2

The Tamil Nadu Industrial Development Corporation Ltd., Madras

SO 1260

18-3-1971 3

The Rural Electrification Corporation Ltd., New Delhi

SO 1490

13-3-1971 3

The National Small Industries Corporation Ltd.

The Madhya Pradesh Audyogik Vikas Nigam Ltd.

The West Bengal Industrial Development Corporation Ltd.

The Kerala State Industrial Development Corporation Ltd.

The State Industrial & Investment Corporation of Maharashtra Ltd.

SO 5254

29-11-1971

The Gujarat Industrial & Investment Corporation Ltd.

The Andhra Pradesh Small Scale Industrial Development Corporation Ltd.

The Punjab State Small Scale Industries Corporation Ltd.

The Uttar Pradesh Small Scale IndustriesCorporation Ltd.

Rajasthan State Industrial & Mineral Development Corporation Ltd., Jaipur

SO 18(E)

6-1-1972

Industrial Reconstruction Corporation of India Ltd., Calcutta

SO 359(E)

29-6-1973 3

Pradeshiya Industrial and Investment Corporation of Uttar Pradesh Ltd., Lucknow

SO 220(E)

27-3-1974 1

1. Omitted by the Finance Act, 1976, w.e.f. 1-4-1977.

2. For and from the assessment year 1964-65.

3. For and from the assessment year 1972-73.

1. For and from the assessment year 1973-74.

What to watch

This is a compilation under the Companies (Profits) Surtax Act, 1964, not the Income-tax Act.
The text's own footnote records that clause (v) was omitted by Finance Act, 1976 with effect from 1 April 1977, so the list serves only assessment years before that.
Each entry is good only from the assessment year its footnote gives; an institution notified later does not help an earlier year.
An institution not on the list gets nothing from this compilation, however similar in character.

Where you meet it

In an old surtax assessment or appeal where the capital computation turns on whether a lender was a notified financial institution.

What it names

Rules it names. Rule 1 of the Income-tax Rules, 1962. The 1962 Rules were replaced by the Income-tax Rules, 2026, which renumbered nearly everything: a rule number quoted here almost never means the same rule today.

A circular binds the department, not you and not a court. The Board issues a circular to its own officers. An assessee may hold the department to a circular that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves.

Source: the Income Tax Department’s own published text — its page for this instrument.