Separate apportionment under section 23A prevents clubbing industrial and non-industrial profits for additional super-tax.

Explanation 2 to section 23A is applied separately to the industrial and non-industrial segments of a composite business, so the prescribed distribution percentage must be worked out on each segment as though it were the company's total income for that part. The analysis states that dividends and taxes are correspondingly apportioned, but the statute does not require actual dividends to be divided strictly in the ratio of industrial and non-industrial profits. Where the statutory percentage has been fully distributed on the industrial profits, no additional super-tax is leviable on that segment, and the revenue cannot club both segments together to charge super-tax on the undistributed balance.

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Issues: Whether, for the purposes of section 23A, the dividends distributed by a company carrying on composite industrial and non-industrial business were required to be apportioned in the ratio of industrial and non-industrial profits, and whether additional super-tax could be levied on the undistributed balance by treating the total profits of both sources as one whole.

Analysis: Explanation 2 to section 23A requires the prescribed percentages to be applied separately to the profits attributable to the two parts of the business, as if each part were the total income of the company for that part. The dividends and taxes are also to be similarly apportioned, but the provision does not impose any rule that the actual dividends must be divided strictly in proportion to the ratio between industrial and non-industrial profits. Once the industrial profits are ascertained and the statutory percentage is found to have been distributed in full, no additional super-tax is leviable on that segment. The revenue's attempt to club both segments together for charging additional super-tax is inconsistent with the fiction created by the Explanation, which must operate separately for each category of income.

Conclusion: The statutory apportionment contended for by the revenue was rejected, and the Tribunal was right in holding that no additional super-tax was leviable on the industrial profits where the prescribed distribution for that segment had been made.

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