9911796707
TMI Blog1967 (5) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... 1, 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 year 1955, relevant to the assessment year 1956-57, it disclosed a net income of Rs. 2,05,840 in its balance-sheet. The assessment was completed on October 15, 1957. The general meeting of the assessee was held on December 29, 1956, but no dividend wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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 erstwhile managing agent and creditor" were entirely irrelevant to section 23A. The assessee then took the matter to the Income-tax Appellate Tribunal. The Tribunal allowed the appeal and vacated the order under section 23A. The Appellate Tribunal, after setting o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 section 66(1) of the Act and prayed that a statement of the case be drawn up and the following question referred to the High Court : "Whether, on the facts and in the circumstances of the case, the amount of dividends declared in favour of the assessee was rightl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 company in which the assessee held shares was fictional or notional income or whether the assessee, on the facts of the case, should be deemed to have become entitled to receive the amount of dividend as soon as the declaration was made or later. In our opinion, the quest ..... X X X X Extracts X X X X X X X X Extracts X X X X
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