Commercial justification for non-declaration of dividend treated as a pure question of fact, leaving additional tax levy undisturbed.

The company's non-declaration of dividend was upheld as commercially justified, because the authorities found that business needs and liability to the holding company required retention of funds for repayment. The challenge failed since the dispute depended wholly on the factual assessment of the company's financial position and business exigencies, not on any legal principle requiring further examination. On that basis, the issue was treated as a pure question of fact, no question of law arose, and the levy of additional tax was not disturbed.

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Issues: Whether, on the facts of the case, the company was justified in not declaring dividend so as to avoid levy of additional tax under section 104 of the Income-tax Act, 1961, and whether any question of law arose.

Analysis: The authorities below had found that the non-declaration of dividend was justified by business considerations, including the company's liability to the holding company and the need to repay that amount. The challenge before the Court turned on whether such justification could be disturbed as a legal question, but the determination depended entirely on the factual assessment of the company's financial position and business needs.

Conclusion: The issue was held to be a pure question of fact, no question of law arose, and the levy of additional tax was not interfered with.

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