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TMI Blog1980 (12) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... common order for the sake of convenience. The assessment years involved are 1974-75 and 1975-76 and the corresponding previous years are the years ended 31st Dec., 1973 and 31st Dec., 1974 respectively. 2. The assessee was incorporated on 13th Feb., 1973. The object was to manufacture and sell certain chemicals. However, pending the setting up of the industrial unit, the assessee undertook so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, 1975 it is stated as below: "Your Directors are of the view that it is necessary for the Company to retain the year's earnings in order to meet the needs of its manufacturing programme. The Directors have therefore, not recommended any dividend for the year ended 31st Dec., 1974." 4. The assessee not having declared dividend at the prescribed rate in both the years, the provisions of s. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... station and that the Directors consciously took the decision to plough back the profits of the Company for the facility of setting up its manufacturing business. It is significant that it was borrowing loans and increasing its paid-up capital at the same time. Sri S. Krishnan, the ld. Deptl. Rep., pointed out that the accounts of the assessee-company showed that it paid out donations and suggeste ..... X X X X Extracts X X X X X X X X Extracts X X X X
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