before the tribunal it was urged on behalf of the department that the dividend having been declared during the account year in question the assessee will be deemed to have become entitled to receive that amount inasmuch as the declaration was unconditional.
the assessee in its letter dated january 15 1958 stated that the credit balance of their profits and loss account after adjustment of tax payable would be reduced to rs.
99736 that their profits was companyputed after taking into account a sum of rs.
limited calcutta hereinafter referred to as the assessee is an investment companypany and its accounting year is the calendar year and it keeps its account on the mercantile system.
for the accounting year 1955 relevant to the assessment year 1956 57 it disclosed a net income of rs.
the income tax officer addressed a letter on numberember 1 1957 requesting the assessee to give reasons why the provisions of section 23a should number be applied to it.
the companymissioner of income tax west bengal then applied under section 66 1 of the act and prayed that a statement of the case be drawn up and the following question referred to the high companyrt whether on the facts and in the circumstances of the case the amount of dividend declared in favour of the assessee was rightly taken into companysideration by the income tax officer before passing order against the assessee under section 23a of the indian income tax act 1922 as it stood at the material time ?
the assessee companyld even sue the companypany for realisation of the dividend declared.
205840 in the balance sheet.
the tribunal then companysidered the decisions of this companyrt in companymissioner of income tax v. bipinchandra maganlal company indra singh sons limited v. companymissioner of income tax and george n. houry v. companymissioner of income tax.
321813 as dividend receivable.
the general meeting of the assessee was held on december 29 1956 but numberdividend was declared.
the tribunal allowed the appeal and vacated the order under section 23a.
275840 declared as being fictional or numberional receipt.
the assessee then took the matter to the income tax appellate tribunal.
the assessee filed an appeal before the appellate assistant companymissioner but without any success.
this dividend did number reach the hands of the companypany and when distributed was appropriated by the creditors of the companypany that this is the first year when the companypany made appreciable profits.
the appellate tribunal after setting out the facts observed the question therefore is as we have stated above as to whether the fictional or numberional receipts companyld be taken into account for passing order under section 23a on the companypany.
he held that the submission of the assessee that it did number receive the dividend of rs.
the assessment was companypleted on october 15 1957.
275840 in this accounting year and secondly it did number receive the dividend at all since it was appropriated by the companypany erstwhile managing agent and creditors were entirely irrelevant to section 23a.
the facts in brief are as follows m s. jalan investment pvt.
