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TMI Blog1989 (9) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... s for the purpose of application of section 104 ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal is right in holding that 'consolidating its business in other fields' are 'the necessities of the business' and are not the above findings (also views) wrong and without being considered/without any evidence of being considered by the, directors?" The respondent (assessee) is a private limited company. We are concerned with the; assessment year. 1974-75. The previous year ended on March 31, 1974. The sole dispute between the assessee and the Revenue was with regard to the determination of the quantum of distributable income under section 104 of the Income-tax Act. The assessee disclosed sum of Rs. 9,56,078 under c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment year. Aggrieved by the order of the Tribunal, dated October 27, 1982, rendered in the appeal the Revenue filed an application under section 256(1) of the Income-tax Act praying that certain questions of law formulated by it which, according to it, arose out of the appellate order of the Tribunal, may be referred to this court. It was declined. Thereafter, the Revenue moved this court in 0. P. No. 7606 of 1983 under section 256(2) of the Income-tax Act. It is in compliance with the directions of this court that the questions of law, formulated hereinabove, have been referred by the Appellate Tribunal for the decision of this court. We heard counsel. Counsel for the Revenue brought to our notice a Division Bench decision in Car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in paragraphs 5 and 6 of the order, whereunder the submissions with reference to the above aspects have been made. The assessee's counsel submitted that the Appellate Tribunal was inclined to accept the above submissions to uphold the claim of the assessee that it was prevented by the smallness of the profits from declaring dividend for the year. We are in agreement with the submissions made by the Revenue. On the first aspect we should state that capital gains realised by the assessee should be reckoned for arriving at commercial profits for the purpose of section 104 of the Income-tax Act. We are fortified in this view by the Bench decision of this court in Cardamom Marketing Co. (Trav.) Ltd.'s case [1986] 158 ITR 621. In this view of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered, the order of the Tribunal is infirm. It is not in accordance with law. In this view of the matter, we are of the view, that, as the order of the Tribunal stands at present, the findings and the conclusion reached by it do not indicate the material on the basis of which the findings of fact were arrived at., To this extent, the findings entered by the Tribunal are without any material. We hold so. We answer question No. 2 in this perspective in the affirmative, against the assessee and in favour of the Revenue. But since we are answering the question in favour of the Revenue due to a technical infirmity found in the order of the Tribunal, we direct the Tribunal to restore the appeal to file and consider the appeal on this aspect alone ..... X X X X Extracts X X X X X X X X Extracts X X X X
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