1970 (3) TMI 37

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....e respondent-assessee is a limited liability company. The question relates to the accounting year 1950 ending with March 31, 1950, and the assessment year 1950-51. In connection with the accounts of the above accounting year, the annual general meeting of the assessee-company was held on December 23, 1950. According to the approved balance-sheet of the company, the commercial profits came to Rs. 5,18,364. The assessable income was determined at Rs. 8,66,503. The tax liability in respect of the above assessable income was Rs. 3,52,070. In the result, upon deduction of the above tax liability from the above assessable income, in the opinion of the Income-tax Officer, Rs. 5,14,496 remained in the hands of the assessee-company. The company had ....

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.... general meeting of the company was held. The Appellate Assistant Commissioner set aside that order on October 15, 1960. The Appellate Tribunal by its order dated October 10, 1962, confirmed the findings made by the Appellate Assistant Commissioner and the original order of the Income-tax Officer thus stands reversed. In support of the question raised before us, Mr. Joshi for the revenue submits that the Appellate Tribunal accepted the contention of the department that Rs. 3,83,691 which were refundable in respect of excess profits tax recovered from the assessee-company were liable to be included in the amount of commercial profits shown by the assessee-company in the accounting year. The Appellate Tribunal, however, was not justifie....

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....erjee, the profits which can be compelled to be distributed as dividends under section 23A must be commercial profits in the year of account in respect whereof the powers under section 23A are intended to be exercised. The first submission made by Mr. Joshi, on the face of it, is without any substance. The amounts which were required to be deposited as excess profits tax deposits have been described in the Ordinance No. XVI of 1943 in the following manner : " when excess profits tax......becomes payable......after assessment made...., the person liable to pay such excess profits tax shall deposit....,a further sum equal to one-fifth of the amount of the said excess profits tax....... " In pursuance of the provisions in the Ordinance a....