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TMI Blog1983 (1) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 1,086. The ITO, however, estimated the passenger receipts at Rs. 4,50,000 as against Rs. 3,36,935. Thus, an addition of Rs. 1,13,065 was made and on computation the income of the assessee was assessed at Rs. 99,860. In appeal, the total income was reduced by Rs. 9,860 by the AAC. There were cross-appeals for the assessment years 1957-58 and 1958-59. The assessee's appeals came to be dismissed. The references for the assessment years 1957-58 and 1958-59 made under s. 66(2) of the Indian I.T. Act, 1922, arising out of the orders of the Appellate Tribunal for the assessment years 1957-58 and 1958-59 are said to be still pending. The ITO then made an order under s. 23A of the Indian I.T. Act, 1922, and found that the distributable pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld buses amounting to Rs. 36,775 only. Taking into account the profits of the year amounting to Rs. 30,889, the total came to Rs. 67,664 and it was found that the balance amount has to be provided from loans or payment had to be deferred. Such being the position, according to the Tribunal, it would be unreasonable to expect the company to declare dividends out of the profits of the year in question. The Tribunal further considered the assets and liabilities of the company and found that as on July 31, 1957, the balance-sheet showed a loss of Rs. 92,991 arrived at by deducting the profit of Rs. 30,889 from the losses carried forward to the tune of Rs. 1,23,880. The authorised capital of the company was Rs. 1,00,000 and the subscribed and pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the learned counsel for the Revenue, we are satisfied that an answer given to question No. 2 either way could make the consideration of the controversy in question No. wholly academic. We have already referred to the fact that reference under s. 66(2) calling in question the estimated addition of Rs. 1,13,065 is pending in this court. There is a clear possibility of a contradictory decision with regard to these additions if we take a particular view on question No. 1 and then a contrary view is taken in the reference. We would like to obviate that possibility. We are also satisfied that basically the question involved in this reference is whether there was a liability of the assessee under s. 23A(1) of the Indian I.T. Act, 1922, and if f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the relevant assessment year. The business of the company is of transporting passengers. The Tribunal has found that if the old buses were not replaced, the company ran the risk of its permit being cancelled. Thus, if the expenditure on the new buses was not incurred, the very profit making machinery would have been adversely affected and the business would have considerably been reduced. Even that one ground, in our view, was sufficient to create an infirmity in the order of the ITO and the AAC who held that the assessee was liable to pay super-tax under s. 23A(1) of the Indian I.T. Act, 1922. This consideration, in our view, is sufficient to answer question No. 2 against the Revenue and as already pointed out above it is not necessary to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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