1983 (5) TMI 69

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....ioner (Appeals) accepted this figure with a rider that it is to be verified. The assessee declared dividend of Rs. 75,000. Obviously, therefore, the amount declared is not in conformity with the provisions of section 104 but the assessee pleaded that in view of certain facts, which we will deal with presently, the dividends were not declared beyond the sum of Rs. 75,000. This plea of the assessee based on a number of grounds was not accepted by the revenue authorities and, therefore, this appeal is filed before the Tribunal. 3. Among various grounds, one of the grounds urged by Mr. C.S. Agarwal is based on the smallness of profit which would not only include the quantum of profits available for the declaration of dividend but also the expe....

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...., contended that the view taken by the Commissioner (Appeals) was erroneous inasmuch as section 107A is no bar for considering the various factors while dealing with the provisions of section 104 as laid down by the judicial pronouncements. He particularly relied on the decision of the Allahabad High Court in CIT v. Jananamandal Ltd. [1977] 106 ITR 976. The learned departmental representative, on the other hand, pointed out that in view of the language of section 104, which mentions that it is operative subject to the provisions of section 107A, the latter section should prevail and the judicial pronouncements enlarging the scope of concept of smallness of profits no longer represent the correct view on the point. 6. On a bare perusal of s....