COMMISSIONER OF INCOME TAX, CALCUTTA vs BRAITHWAITE AND CO. LTD.

The Supreme Court held that under Rule 1(v) of the Second Schedule to the Companies (Profits) Surtax Act, 1964, the repayment of borrowed money must occur during a period exceeding seven years to qualify for inclusion in the capital base. The Court clarified that 'not less than seven years' implies a requirement for repayment to extend beyond the seven-year mark. Consequently, the entire term loan of Rs. 50,00,000 did not qualify, except for Rs. 16,00,000 which was not contested by the Revenue, leading to a partial allowance of the appeal.