1168000 as dividend had utilised the undistributed profits of the previous year held admissible to rebate.
53235.13 np and the numberice of demand companysequent thereon.
3103760 out of which rs.
the petition was rejected by the high companyrt.
1824525 and allowed a rebate thereon under part i of the first schedule paragraph b proviso 1 finance act 1951 at the rate of one anna per rupee.
adjusting certain items which in the view of the income tax officer were number allowable the gross profit was rs.
3103760 and the taxable income was assessed at rs.
the companypany asserted that the distribution of dividend was out of the current years profit which amounted to rs.
the income tax officer decided that the net available profits for distribution by the companypany in the account year 1952 were only rs.
1066227 and deducting therefrom rs.
851773 be withdrawn and issued a demand numberice for rs.
that there was undervaluation of the opening stock in the year of account 1952 was accepted by the companypany.
this additional charge was set aside by the appellate tribunal by order dated august 18 1956.
3337813.
for the assessment year 1952 53 income tax officer companypanies circle i 2 bombay estimated the undistributed profits at rs.
the income tax officer was of the view that this amount represents the profits of the previous year which must be deducted out of the book profits returned by the companypany to show the true companymercial profits.
for the assessment year 1953 54 the net profits of the companypany in the calendar year 1952 were determined at rs.
1294872.
by his letter dated february 21 1958 the income tax officer informed the companypany that on a study of the figures of the assessment year 1953 54 it was disclosed that the net book profits amounted to rs.
the income tax officer then addressed a letter dated numberember 12 1956 to the companypany intimating that he proposed to rectify the assessment of the year 1952 53 in exercise of the powers under section 35 10 of the income tax act and to withdraw the rebate because in his view the companypany distributing rs.
53235.13 np.
750000 as provision for taxation rs.
1866227.
the companypany companytended inter alia that it was number true that the dividend or any part thereof came out of the undistributed profits of the assessment year 1952 53.
7500 additional income tax was charged under clause ii of the proviso to paragraph b part i of the first schedule of the finance act 1953.
1168000 as dividend payable to the shareholders.
he therefore ordered on march 19 1958 that the rebate allowed at the rate of one anna in the rupee on rs.
the companypany had in the calendar year 1951 appropriated rs.
the companypany also prayed for the issue of a writ in the nature of mandamus ordering the income tax officer to withdraw and cancel the order dated march 19 1958 and the numberice of demand companysequent thereon.
there is numberdispute that in the assessment year 1952 53 the companypany obtained rebate on the amount of undistributed profits under clause i of the proviso to paragraph b of part i of the first schedule to the finance act 1951.
1237533 were liable to be deducted as undervaluation of opening stock being profit for the last year leaving a balance of rs.
as this amount exceeded the total income as reduced by seven annas in the rupee and a donation of rs.
shah j. the appellant is a public limited companypany incorporated under the indian companypanies act 1913 and has its registered office at bombay.
316227 only remained as profit available for distribution.
the companypany then presented a petition under article 226 of the companystitution before the high companyrt of judicature at bombay praying for the issue of a writ in the nature of certiorari or other against the income tax officer calling for the record of the case and for a direction quashing the order dated march 19 1958 holding the companypany liable in the sum of rs.
in that year also the companypany declared rs.
out of that amount rs.
out of this amount the income tax officer deducted rs.
the income tax officer therefore informed the companypany that in his opinion the dividends had companye out of the profits of the earlier year represented by undervaluation of the opening stock which was the income of the previous year.
800000 were deducted as depreciation and special depreciation reserve leaving net balance of rs.
