1989 (8) TMI 7

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.... question of law has been referred to this court by the Tribunal under section 256(2) of the Income-tax Act, 1961 : " Whether, on the facts and in the circumstances of the case, any larger dividend than that declared by the assessee-company could reasonably be distributed within the meaning of section 104 of the Income-tax Act, 1961, and the application of section 104 of the Income-tax Act, 1961, ....

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....f the statutory reserve as required to be created under section 205A of the Companies Act was created, even then the company could have distributed a larger percentage of dividend. There were sufficient funds in the hands of the company to create statutory reserves and pay the required percentage of dividends. The Income-tax Officer was also of the same view. The Tribunal, however, has not exam....