TMI Blog1977 (11) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred to by the Tribunal as " Hindustan "). Though the assessment of the assessee related to the accounting year ending 31st October, 1956, the ITO took the accounting year ending 31st March, 1957, as the previous year for the purposes of deemed dividends under s. 2(6A)(e) of the I.T. Act, 1922. On the basis of the accounts of Krishna and Hindustan, the ITO found that in the account with Krishna company, though on 1st January, 1956, there was a credit balance in favour of the assessee amounting to Rs. 8,59,435 and this continued till 5th October, 1956, there was a debit of Rs. 6,23,541 as on 31st December, 1956, though by the end of 31st March, 1957, the assessee had again become a creditor in the sum of Rs. 62,084. Similarly, in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even for the purposes of deemed dividends the computation should have been made on the basis of the Diwali year and if the Diwali year was adopted, then the entire amount of deemed dividends from Hindustan Co. would have to be left out of consideration. So also, since the entire amount in respect of the Krishna Co. pertained to the period 1st January, 1957, to 31st March, 1957, the amount of Rs. 1,77,303 would fall outside the proper accounting year and the Tribunal observed that, on this preliminary ground, the appeal filed by the assessee would have to be allowed. The finding on the question of the accounting year could really have disposed of the appeal, but the Tribunal proceeded to deal with the other contentions advanced by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have now been referred, one each at the instance of the revenue and the assessee. The question referred at the instance of the revenue is: " Whether, on the facts and in the circumstances of the case, a sum of Rs. 2,74,716 or lesser amount was assessable as dividends under s. 2(6A)(e) of the I.T. Act, 1922 ? " The question referred at the instance of the assessee is : " Whether, on the facts and in the circumstances of the case and on a proper interpretation of the expression 'accumulated profits' in s. 2(6A)(e) of the Act, the Tribunal was right in holding that the Krishna and Hindustan had accumulated profits within the meaning of the section ? " When the reference was taken up for hearing, it was pointed out by the learned coun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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