Deemed dividend dispute became academic after the unchallenged accounting period finding placed sums outside the relevant year.

The deemed dividend issue under section 2(6A)(e) of the Income-tax Act, 1922 became academic because the Tribunal's unchallenged finding fixed the relevant accounting period as the assessee's Diwali year ending 31 October 1956, not the company's later year ending 31 March 1957. On that basis, the disputed sums fell outside the previous year concerned, so the questions on accumulated profits and related taxability did not survive for determination. The HC therefore declined to answer the referred questions and left the merits of the taxability dispute undecided.

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Issues: Whether the Court should answer the referred questions on deemed dividend and accumulated profits, when the Tribunal's unchallenged finding on the correct accounting period had already put the disputed amounts outside the relevant previous year.

Analysis: The Tribunal had held that, for the purpose of deemed dividends under section 2(6A)(e) of the Income-tax Act, 1922, the relevant accounting period was the assessee's Diwali year ending 31 October 1956, and not the company's later accounting year ending 31 March 1957. That finding was not challenged by the revenue. In that situation, the controversy as to whether the sums could be assessed as deemed dividends no longer survived for the assessment year in question, and it was unnecessary to examine the Tribunal's other conclusions on accumulated profits and related matters.

Conclusion: The Court declined to answer the referred questions and did not decide the merits of the taxability issue.

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