TMI Blog1967 (5) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Indian Income-tax Act, 1922, hereinafter referred to as "the Act". The only question which falls for consideration is whether a referable question of law arises or not out of the order of the Appellate Tribunal, B-Bench, Calcutta, dated May 21, 1962. It may be mentioned that the only order of the High Court which appears on record is a formal order containing no reasons for dismissing the petition of the Commissioner of Income-tax under section 66(2) of the Act. The facts, in brief, are as follows : M/s. Jalan Investment (Pvt.) Ltd., Calcutta, hereinafter referred to as "the assessee", is an investment company and its accounting year is the calendar year, and it keeps its accounts on the mercantile system. For the accounting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Co. by the company itself or its creditors is a fact in the nature of application of such income. It is not, therefore, open for an assessee to say that as the entire income has been applied towards the liquidation of some liabilities the provisions of section 23A do not therefore have any application. Once profits have been made it is immaterial how they have been applied or appropriated by the company or its creditors." The assessee filed an appeal before the Appellate Assistant Commissioner but without any success. He held that the submission of the assessee that it "did not receive the dividend of Rs. 2,75,840 in this accounting year and secondly, it did not receive the dividend at all since it was appropriated by the company erstwhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income under the Income-tax Act itself and therefore the submission by the department representative, in our opinion, goes against the Act itself, which certainly cannot be permitted." The Tribunal finally concluded thus : "A mere declaration of dividend, in our opinion, does not stand the test inasmuch as although a declaration might have been made still it might not be the property of the trader to be included in the calculation of its commercial profits. We will only add that in saying so we have not taken into consideration the fact that a major portion of the declared dividends in the assessee's favour had been appropriated at source by the assessee's creditors." The Commissioner of Income-tax, West Bengal, then applied under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Commissioner then applied to the High Court under section 66(2) of the Act but the High Court dismissed the petition. As stated above, apparently the High Court gave no reasons for dismissing the petition. The learned counsel for the appellant contends that the point has not been settled in the decision of this court in Commissioner of Income-tax v. Bipinchandra Maganlal Co. In our view, with respect, the Appellate Tribunal has not appreciated the judgment of this court in the above case. This court laid down the principles which the Income-tax Officers should observe in passing an order under section 23A of the Act. Nowhere does it deal with the question at issue in the present case, namely, whether dividends distributed by a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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