1981 (9) TMI 51

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....I J.-The question referred to us at the instance of the Commissioner by the Income-tax Appellate Tribunal (Bombay Bench 'C') is as follows : "Whether, on the facts and in the circumstances of the case, the Tribunal erred in holding that the action under section 104 of the Incometax Act, 1961, was not justified ? " The assessee is a private limited company and the assessment years involved ar....

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....ll the years to the Income-tax Appellate Tribunal. After surveying the position of the assessee, the Tribunal observed as under: " In our opinion, the directors would have acted irresponsibly if they had declared dividends in the present years. First of all, we may mention that the company had lost Rs. 21 lakhs of its circulating capital invested in the money-lending business, which the Departm....

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....ty for additional super-tax. As mentioned earlier, for two years sec. 23A orders were actually passed, resulting in a demand of Rs. 2,50,000 and it was in 1968 that the Appellate Asst. Commissioner cancelled the orders. It was also as late as 1966 that the Income-tax Officer dropped the proceedings for other years. The directors had, in the reports to the shareholders, specifically pointed out tha....

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....as the previous losses, the present profits, the availability of surplus money, the reasonable requirements of the future and similar other factors. It has been observed further that the ITO must take an overall picture of the financial position of the business. He should put himself in the position of prudent businessman or the director of a company and deal with the problem with a sympathetic an....