151902/7/0 was available for distribution to the shareholders as dividends.
128112/7/5.
as the amount distributed by the companypany was below 60 per cent.
of the assessed profits less income tax.
72000.
numberwithstanding the said deduction as the amount of rs.
appeal from the judgment and order dated september 4 1961 of the calcutta high companyrt income tax reference number 85 of 1956.
per share thus making a total distribution of rs.
learned attorney general appearing for the revenue company tended that the balance sheet of a companypany on the basis of which dividends were declared was final and the profits disclosed thereunder would be the companyrect basis for the income tax officer acting under s. 23a of the act and as the balance sheet of the companypany for the relevant year showed a sum of rs.
alternatively he companytended that if the respondent could be permitted to go behind the balance sheet to ascertain the real profit the department should also be likewise allowed to go behind the balance sheet to show that the companymercial profit was larger and the reserves were in excess of the past liabilities and that in that event to remand the case for ascertaining the true state of facts.
44000 distributed by the companypany was less than 60 per cent.
33345/12/0 he held that a sum of rs.
64000 being 60 per cent.
in the result it answered both parts of the question referred to it in the negative.
81517/13/0 and c.t.
of rs.
if the difference between the tax assessed and the estimated tax was also deducted from the profits there would only be a sum of rs.
28000.
573161 as taxation reserve and a sum of rs.
the said distribution of dividends related to the accounting year 1947 48 which ended on april 13 1948.
on a further appeal the income tax appellate tribunal held that the amount of profits should be judged only from the balancesheet and that judged by the figures given thereunder a dividend to the extent of rs.
the profit left was rs.
the assessee preferred an appeal to the appellate assistant commissioner against the order made by the income tax officer under s. 23a of the act.
it came to the companyclusion that having regard to the smallness of the profits the order of the income tax officer was number justified.
messrs.
he further held that the assesee incurred no losses in the previous years that in almost all the past assessments the assessee showed substantial profits that the profits disclosed in the year of account were number small and that therefore the direction to pay a higher dividend was number unreasonable.
44000.
151902 minus rs.
66000 the tax assessed for the year was rs.
the tribunal referred the following question under s. 66 1 of the act for the decision of the high companyrt of calcutta whether on the facts and in the circumstances of the case any larger dividend than that declared by the companypany companyld reasonably be distributed within the meaning of section 23a of the indian income tax act and the application of section 23a of the indian income tax act was in accordance with law.
by the time the appeal came to be disposed of in an appeal against the order of assessment the assessed income was reduced by a sum of rs.
k. daphtary attorney general r. ganapathy iyer and n. sachthey for the appellant.
80926.
civil appellate jurisdiction civil appeal number 807 of 1963.
v. viswanatha sastri and s. c. muzumdar for the respondent.
56000.
on that basis the profit that was available for further distribution was rs.
though under the balance sheet the estimated tax was rs.
79400.
the income tax officer assessed the total income of the assessee for the year 1948 49 at rs.
after deducting the tax payable under the two heads namely i.t.
of rs.
of the profits available for distribution the income tax officer with the previous approval of the inspecting assistant companymissioner of income tax passed an order under s. 23 a of the act directing that the amount of rs 107902 i.e. rs.
the high companyrt held that the tribunal went wrong in taking into companysideration the past profits instead of the past losses the taxation reserves without companysidering the past liabilities for taxation and the profits for the year in question disclosed in the balance sheet ignumbering the actual tax assessed for that year.
the judgment of the companyrt was delivered by subba rao j. this appeal by certificate raises the question of the companystruction of the provisions of s. 23a of the indian incometax act 1922 hereinafter called the act before it was amended by the finance act 1955.
164440 arrived at on the basis of the revised calculation the appellate assistant commissioner held that an action under s. 23a of the act was justified.
the directors declared a dividend at the rate of 51 per cent.
gungadhar banerjee company private limited the respondent herein is a private limited companypany.
according to the balance sheet of the companypany for that year the net profit for the said year was rs.
4000 that would remain as undistributed profits.
105950 as capital reserve brought forward a sum of rs.
107902 shall be deemed to have been distributed as dividends as on the date of the annual general meeting of the companypany.
per share.
266766.
hence the appeal.
44000 rs.
he found that having regard to the profits earned in the earlier years and the capital and taxation reserves payment of larger dividends would number be unreasonable.
the relevant and undisputed facts may be briefly stated.
the taxation reserve was rs.
at the general body meeting of the companypany held on december 6 1948 the directors declared a dividend at the rate of 5 1/2 per cent.
of the balance of rs.
companyld be distributed and that such distribution was number unreasonable.
