Section 23A covers property income companies where statutory language shows no exclusion from undistributed profits treatment.

Section 23A was construed broadly and not as limited to business income alone. The Calcutta HC treated the classification of income under Section 6 as a computation method, not a basis for excluding a company whose income was wholly assessable under Section 9 from the section's scope. It also rejected the argument that notional property income could not be distributed in practice, noting that the statutory language contained no exclusion for property companies and allowed discretion where profits were small. On that analysis, Section 23A was held applicable to the company, and the question was answered in favour of the Revenue.

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Issues: Whether Section 23A of the Indian Income-tax Act applied to a company whose entire income was derived from property assessable under Section 9 of the Act.

Analysis: The expression "profits and gains" in Section 23A was held not to be confined to business income alone. The Act uses the expressions "income" and "profits and gains" in a broader sense across different heads of income, and Section 23A itself refers to the undistributed portion of assessable income as well as profits and gains. The classification of income under Section 6 was treated as a method of computation and not as a basis for excluding property companies from the section. The contention that notional property income could not practically be distributed was rejected, as the section gave discretion where profits were small and the statutory language contained no exclusion for companies whose income consisted only of property income.

Conclusion: Section 23A applied to the assessee company, and the question was answered in the affirmative, against the assessee and in favour of the Revenue.

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