TaxTMI 
TaxTMI 
1996 (10) TMI 65
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....justified in upholding the applicability of section 104 of the Income-tax Act ? " The assessee is a private limited company engaged in transport business. The net profit of the assessee-company for the accounting period ending January 31, 1975, was shown at Rs. 10,23,025. The assessment was, however, made on the total income of Rs. 14,30,470, vide assessment order dated September 16, 1978, for the assessment year 1975-76. The accounting period for the aforesaid assessment year was February 1, 1974, to January 31, 1975. The assessee went in appeal and the income was reduced by the Commissioner of Income-tax to Rs. 11,56,750. The income was, further reduced in the second appeal filed by the assessee before the Tribunal to Rs. 10,73,499. Th....
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....ly was left as profit available for distribution as dividend. Therefore, dividend at the rate of 35 per cent. of the equity capital was declared at Rs. 63,770. The balance profit of Rs. 52,311 was carried forward to the next year. The Assessing Officer took the view that the profit distributed by way of dividend was less than the statutory percentage of the distributable income of the company of the previous year. The Assessing Officer reduced the total income of Rs. 10,73,499 (as finally determined by the Tribunal) by an amount of Rs. 7,44,449 by way of income-tax payable and other adjustable expenses. The balance amount of Rs. 3,29,050 was treated to be the amount of distributable income available in the hands of the company. The Assessin....
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....ssee had paid a total sum of Rs. 11,53,050 by way of tax for the earlier assessment years. In addition, a sum of Rs. 6,10,034 was further to be paid for the assessment years 1970-71, 1971-72 and 1972-73. If the tax already paid for the earlier years as well as the tax payable for the earlier years were aggregated, the provision for taxation, made by the company before the commencement of the current accounting year, would be found to be insufficient and, therefore, the current year's profits shall have to be reduced by the amount of tax which remains payable. The aggregate of the tax already paid (Rs. 11,53,050) and the tax payable (Rs. 6,10,034) for the earlier years comes to Rs. 17,63,084. As against the aforesaid amount of tax for the ea....
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....ier years for taxation and also the provision made during the current year out of the current year's profits. Shri R. P. Sawhney, learned senior counsel for the Department, also took pains to look into the computation, worked out by the Assessing Officer as well as the Commissioner of Income-tax and the learned Members of the Tribunal but Shri Sawhney was unable to support the computation. We have looked into the computation made by the Commissioner of Income-tax as well as the learned Members of the Tribunal and we are of the view that the two provisions for taxation, made by the company in its balance-sheet, were not taken into account for the purposes of adjustment of the past tax liabilities and the current year's tax liability. As w....