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TMI Blog1984 (8) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... the distributable income under section 109 of the Income-tax Act, the Tribunal was right in holding that no deduction should be made of the two items of Rs. 6,610 and Rs. 8,074 ? " The assessee is a private limited company to which the provisions, of s. 104 of the I.T. Act, 1961 (hereinafter referred to as " the Act "), are applicable. For the assessment year 1972-73, the total income of the assessee was finally determined at Rs. 71,830. Since the assessee had not distributed any dividend during the year, the ITO made an order determining the distributable income at Rs. 23,639 and directed the company to pay additional tax of Rs. 8,746 while rejecting the contention of the company that because of smallness of the profits as disclosed in i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer has to be satisfied that the dividends distributed by the company during the prescribed period are less than the statutory percentage, i.e., 60 per cent. of the assessable income of the company of the previous year less the amount of income-tax and super-tax payable by the company in respect thereof. Unless there is a deficiency in the statutory percentage, the Income-tax Officer has no jurisdiction to take further action thereunder. If that condition is complied with, he shall make an order declaring that the undistributed portion of the assessable income less the said taxes shall be deemed to have been distributed as dividends amongst the shareholders. But before doing so, a duty is cast on him to satisfy himself that, having regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Mr. Sarangan for the assessee, on the other hand, strongly relied upon the decision of the Madras High Court in Gobald Motor Service Ltd. v. CIT [1963] 47 ITR 734 and of the Calcutta High Court in Reform Flour Mills (P.) Ltd. v. CIT [1978] 111 ITR 852, in support of his contention that the tax liability of the past years is one of the considerations to ascertain the commercial profits of the year in question. In our opinion, there cannot be any hard and fast rule on this aspect of the matter. The ITO has to take into account all the relevant factors depending upon the facts and circumstances of each case. As held by the Supreme Court in the case of Gangadhar Banerjee [1965] 57 ITR 176, the ITO must take an overall picture of the fina ..... X X X X Extracts X X X X X X X X Extracts X X X X
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