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TMI Blog2009 (7) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... Krishan Mehta, Advocate for the respondent. JUDGMENT ADARSH KUMAR GOEL, J. - Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh, has referred following questions of law for opinion of this Court under Section 256 (1) of the Income Tax Act, 1961 (for short, "the Act), arising out of its order dated 28.10.1994 in ITA No. 1407/Chandi/89 relating to assessment year 1984-85:- 1. "Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the provisions of Section 104 of the I.T. Act were applicable even to a company which had not declared any dividend?" 2. "Whether on the facts and in the circumstances of the case, the Tribunal was right in holding, in spite of the commitments of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 1984-85 (page 5 of the compilation) unsecured loans have been shown at Rs.3,50,380/- as on 31.3.1984, as against the sum of Rs. 4,07,667/- as on 31.3.1983. On the assets side current assets, loans and advances have been shown at Rs. 12,30,498/-. It is thus clear that the assessee had not only to repay certain loans but also had to receive back the repayments of certain advances. Therefore, looking to the nature of unsecured loans as well as loans and advances shown on the assets side of the balancesheet, it does not appear to be a sufficient ground for not declaring dividend. It is also not clear as to when loans were required to be repaid. As regards the plea that the profit left with the assessee was very small, we do not find any subst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the payment of a dividend or a larger dividend than that declared within the period of twelve months referred to in sub-section (1) would be unreasonable; or ii) that the payment of a dividend or a larger dividend than that declared within the period of twelve months referred to in sub sec. (1) would not have resulted in a benefit to the revenue; or iii)that at least seventy-five per cent of the share capital of the company is throughout the previous year beneficially held by an institution or fund established in India for a charitable purpose the income from dividend whereof is exempt us/11." 6. A perusal of the above shows that once satisfaction is arrived at that the profits distributed as dividend were less than the statutory p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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