Section 2. Where after the first day of the previous year relevant to the assessment year, the paid up share ca

2. Where after the first day of the previous year relevant to the assessment year, the paid up share capital of a company is increased or reduced by any amount during that previous year, the capital computed in accordance with rule 1 shall be increased or decreased, as the case may be, by a portion of that amount which is proportional to the portion of the previous year during which the increase or the reduction of the paid up share capital remained effective. 3. Where a part of the income, profits and gains of a company is not includjble in its total income as computed under the Income-tax Act, its capital shall be the sum ascertained in accordance with rules 1 and 2, diminished by' an amount which bears to that sum the same proportion as the amount of the aforesaid income, profits and gains bcnrs to the total amount of its income, profits and gains. 2. The balance 'of the total income arrived at after making the exclusions mentioned in rule 1, shall be reduced by- (i) the amount of income-tax and super-tax payable by the company in respect nf its total income under the provisions of the Income-tax Act after making allowance for any relief, rebate or deduction in respect of incorr~e-tax and super-tax to which the company may be entitled under. the provisions of the said Act or the annual Finance Act, and after excluding from such amount- (a) the amount of income-tax and super-tax payable by the company in respect ojf the profits and gains ef any busilsess of life insurailce included in the total income; (b) the amount of income-tax and super-tax payable by the company under the Income-tax Act in respect of any income by way of compensgtjon or other |||||SuperProfitsTax|| |---|---|---|---|---|---| |- - -|- - -|- - -|- - -~|payment refe~red to in clause -(ii.) -of--secti-OII28of-that--'.-.-,---<br>- - - - - - - *<br>Attincluded in the total income;|| |||||(c) the amount02income-tax and<br>super-tax pay-|| |||||able on any inconie chargeable under the head "Capital|| |||||gains" under the Income-tax Act, included in the total|| |||||income;|| |||||(ii) in the case of<br>a company which has been charged|| |||||to tax in a country outside India on any portion of<br>its|.| |||||incolme, profits and gains included in its total income<br>as|| |||||computed under the Income-tax Act, the tax actually paid|| |||||in respect of such income in the said country in accordance|| |||||with the laws in force in that country after allowanceivf|| |||||everyreliefdueunderthe said laws:|| |||||Provided that the<br>aforesaid reduction<br>shall not be|| |||||allowed unless the assessee produces evidence of the fact of|| |||||the payment of the aforesaid tax in that country.|| |||||3.The net amount of income calculated in accordance with|| |||||rule 2 shall be increased by any expenditure incurred on account|| |||||of commission, entertainment and advertisement, to the extent|| |||||such expenditure, in the opinion of the Tncome-tax Officer, is|| |||||excessive having regard to the circumstances of the case:|| |||||Provided<br>that the previous<br>authority of<br>the Inspecting|| |||||Assistant Commissioner is obtained for holding such expenditure|| |||||to be excessive.|| |||||..---|| |||||----<br>>|| |||||THESECO'NDSC'HEDmE|| |||||[Seesection2(9)1|| |||||RULESFORCOMPUTINGTHBCAPITALOFA COMPANYFORTHE|| |||||PURPOSESOFSUPER PROFITS TAX||