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TMI Blog1973 (9) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... see was liable to be proceeded against under section 23A. He, therefore, passed an order under that section. For the assessment year 1961-62 also, the Income-tax Officer found that the profits available for distribution as dividends after payment of tax were Rs. 73,526, that the company declared a dividend of Rs. 31,725, that the said dividend declared fell short of the prescribed limit of 65 per cent. and that, therefore, the assessee was liable to be proceeded against under section 23A. In this view, he passed an order under that section. The assessee filed appeals before the Appellate Assistant Commissioner in respect of both the assessment years, but without success. The assessee filed further appeals before the Tribunal. It was urged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount, cannot be taken as the sole basis for the purpose of finding out divisible profits and that for applying section 23A what is relevant is the commercial profits and not the book profits. Reference is made to the decision of the Supreme Court in Commissioner of Income-tax v. Gangadhar Banerjee Co. In that case, the Supreme Court pointed out the distinction between the assessable profits and commercial profits and held that it is the commercial or accountable profits which are the actual profits earned by the assessee calculated on the commercial principles that will govern the application of section 23A. Dealing with the book profits shown in the balance-sheet of the company the Supreme Court pointed out that, though the balance-sheet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd also for loss incurred in respect of vehicles sold were said to have been wrongly deducted in the calculation of book profits. The Tribunal took the view that, as these amounts represented the outgoings and the loss incurred by the company, they had been rightly deducted in ascertaining the book profits. We find that none of the authorities below has referred to the excess amount of depreciation in relation to the assessment year 1961-62 and, therefore, there appears to be no basis for the contention of the revenue that there was excess provision for depreciation and that has been wrongly excluded in the computation of the profits in the profit and loss account. In view of this position, the order passed under section 23A has rightly bee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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