9911796707
TMI Blog1977 (9) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose of section 23A of the said Act ? (ii) Whether, on the facts and in the circumstances of the case, the assessee-company could not declare any dividend in view of the past losses, tax liability and smallness of profits ? (iii) Whether, on the facts and in the circumstances of the case, the provisions of section 23A were not applicable for the assessment years 1958-59 and 1959-60?" These questions arise on the following facts: In the assessment years 1958-59 and 1959-60, the assessee had filed returns showing a loss of Rs. 9,889 in the assessment year 1958-59 and income of Rs. 62,127 in the assessment year 1959-60. On certain defects being found in the accounts maintained by the company, the Income-tax Officer did not accept the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment years 1958-59 and 1959-60, respectively. The assessee filed an appeal against the order of the Income-tax Officer and the Appellate Assistant Commissioner held on a fresh computation that Rs. 1,76,423 could be held to be surplus available with the company in the assessment year 1958-59 and after deducting the tax liability amounting to Rs. 1,19,342 for the assessment years 1947-48 to 1958-59, he held that Rs. 57,081 were available to the assessee for distributing dividend. Similarly, on a fresh computation in respect of the year 1959-60, the Appellate Assistant Commissioner held that the net surplus available to the assessee was Rs. 77,359. Aggrieved by the order, the assessee filed an appeal before the Appellate Tribunal. The Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d at the instance of the revenue. These observations are: "We agree with the submissions of the assessee's representative that in case where the income is assessed by application of the proviso to section 13 of the Income-tax Act, the said fact in itself would not necessarily mean that the same was the assessee's commercial profits, unless it is specifically shown by positive instances that there was concealment or that the circumstances would go to show that the assessed income was the real income. It is one thing to include a particular item in regular assessment for the purpose of determining the assessee's income, but when it comes to the applicability of the provision of section 23A, we have to go by certain principles in order to det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Luxmi Hosiery Mills P. Ltd. v. Commissioner of Income-tax [1977] 106 ITR 644 (Cal) and the other decision is in Mehar Singh & Co. (P.) Ltd. v. Commissioner of Income-tax [1977] 108 ITR 607 (Cal) which has followed the decision in Banga Luxmi Hosiery Mills' case [1977] 106 ITR 644. The Division Bench of the Calcutta High Court has in Banga Hosiery Mills' case taken the view that where the income has been assessed under the proviso to section 13 of the Indian Income-tax Act, 1922, or under section 145 of the Income-tax Act, 1961, if it is not shown that the additions which have been made were in the nature of either artificial or notional or fictional income, it could not be said that the income so assessed could not be taken into considerati ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
