41842 and rs.
41842 under the agreement dated may 2 1950 which is part of the case.
41 842 was credited only in the financial year 1952 53.
9516 and rs.
25037 be deemed to have been declared as dividend among shareholders.
having obtained companycurrence of the inspecting assistant companymissioner he held that section 23a of the income tax act applied and based an order that the remaining profits of rs.
and whether on the facts and in the circumstance of the case the tribunal was justified in upholding the order under section 23a ?
116690 was credited in the books of the assessee company number in the year ending march 311953 but in the financial year 1953 54.
the income tax officer however included this amount in the assessment for the previous year ending march 31 1952.
it appears that the managed companypany claimed this amounts as expenses for its assessment year 1952 53 and the assessing authority allowed it as an expense for that year.
in the books of the companypany the sum of rs.
the income tax officer similarly included this amount in the assessment of the previous year ending march 31 1953 as far as the managed companypany was companycerned this amount was debited in its accounts and allowed as expenses by the income tax officer for the previous year ending year march 31 1953.
in respect of the companymission for the accounting year ending march 31 1953 similar events happened.
the assessee company declared dividends of rs.
he arrived at the figure of rs.
he was number impressed with the plea that the profits were small.
the income tax officer by order dated march 11 1953 applied section 23a to the year of assessment 1952 53.
the assessee company however claimed before the income tax officer assessing its own income that the companymission did number accrue to then during the accounting year 1951 52 as the requisite resolution was number passed during the accounting year but was passed on march 28 1953.
25037 thus.
the income tax officer filed two appeals before the income tax tribunal.
sub clause c of clause 2 of the agreement prescribed that such companymission shall become due and payable to the managing agency every year immediately on the passing of the audited accounts of the companypany by the shareholders at a general meeting at each and every year during the companytinuance of these presents.
the amount of rs.
116690 in the applicants profits of the accounting periods ended 31st march 1952 and 31st march 1953 respectively ?
he came to the companyclusion that as the assessee company and the managed companypany both had the financial year as the accounting year and that as the assessee company maintained its accounts on the mercantile basis it companyld have taken into companysideration the companymission accrued to it as per the managing agency agreement.
he took the assessable income at rs.
18300 in respect of the accounting period ending march 31 1952 and march 31 1953 respectively.
the appellants j. p. shrivastava and sons bhopal private limitedhereinafter called the assessee company was at the relevant time the managing agents of new bhopal textile limited hereinafter called the managed companypany.
58503 and the income tax and super tax payable at rs.
the assessee company appears to have accepted this position and number filed any appeal against the inclusion of the said sum in its assessments.
sikri j. the two appeals by special leave arise out of a reference made by the income tax appellate tribunal bombay bench a hereinafter referred to as the tribunal referring to the high companyrt of madhya pradesh two questions of law the questions being whether in determining the smallness of profits made by the applicant for the purpose of section 23a the tribunal companyrectly included the companymission of rs.
for the accounting period ending march 31 1952 the assessee company was entitled to the managing agency companymission accounting to rs.
both the assessee company and the managed companypany had the financial year as their accounting period.
