At the instance of the assessee the Tribunal has referred the following question of law directly to this Court for its opinion under section 257 of the Income Tax Act 1961 read with section 18 of the : "Whether on the facts and in the circumstances of the case the Tribunal was justified in excluding a sum of Rs. 3,10,450 representing the dividends declared for the calendar year 1972 from the General Reserves on the opening date of the previous year while computing the capital under the Second Schedule of the for the assessment year 1974 75?" Counsel for the assessee company contended that after con ceding that this was not a case of "proposed dividend" the Tribunal erred in holding that the sum of Rs 3,10,450 representing the dividends paid out from the General Reserve was liable to be excluded while computing the capital of the company as on 1.1.1973 for purposes of sur tax assessment under the 1964 Act.