In these two years Mafatlal Gagalbhai was assessed under section 23 3 of the Income tax Act on a total income respectively of Rs.
3,76,539 and Rs.
10,00,411 for the assessment year 1942 43 must be deemed to have been distributed as dividend to the shareholders of the companypany.
7,96,082 as amounts deemed to have been distributed to him on the ordinary shares.
5,71,072 for the assessment year 1941 42 and Rs.
By that judgment the High Court answered three question referred by the Income tax Appellate Tribunal in favour of the assessee.
The companypany took a further appeal to the Tribunal against the order under section 23A and the Tribunal by its order dated July 29, 1948, took the view that the undistributed profits had number been properly distributed and that there should have been first a distribution among the preference shareholders and the balance thereafter must be deemed to have been distributed amongst the ordinary shareholders.
In the accounting year 1942 he held ordinary shares which were less by 300 and the same number of preference share.
The respondent also had appealed to the Tribunal against the order of the Appellate Assistant Commissioner but seeing the order of the Tribunal in the appeals of the companypany, it was realised that if the appeals were to be proceeded with, there would be additional levy of tax if the matter was referred back to the Department in accordance with the decision in the appeals of the companypany.
As a result of these orders, the Income tax Officer reopened the assessments for the two years, of Mafatlal Gagalbhai, and added Rs.
We are companycerned in this case with the assessment of the income of Mafatlal Gagalbhai for the accounting years 1941 and 1942, companyresponding to the assessment years 1942 43 and 1943 44.
In respect of the companypany, the Income tax Officer passed order on February 20, 1947, applying section 23A to the companypany and holding that Rs.
This action appears to have been taken under section 34 of the Income tax Act.
The legal representative of the assessee also appealed to the Appellate Assistant Commissioner against the demand for tax on the additional sums, but the order was companyfirmed.
The assessee in the cases was Mafatlal Gagalbhai, whose legal representative, Navinchandra Mafatla, had also since died and the present respondents are the legal representatives of Navinchandra Mafatlal.
In the accounting year 194I Mafatlal Gagalbhai held 12, 485 ordinary shares and 2,500 preference shares in a companypany called Gagalbhai Jute Mills Ltd. Calcutta.
The companypany appealed against the order under section 23A to the Appellate Assistant Commissioner, who agreed with the Income tax Officer.
In the first year, numberappeal was preferred, and in the second, the appeals to the Appellate Assistant Commissioner and the Tribunal were unsuccessful.
4,42,693.
Hidayatullah, J. This is an appeal by the Commissioner of Income tax Bombay City, Bombay, on a certificate granted by the High Court of Bombay against its judgment and order dated March 18, 1954.
At the general meeting of the companypany, for the years ending March 31, 1941 and March 31, 1942, numberdividend was declared either on the ordinary or on the preference shares.
