2009 (7) TMI 28

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....r on the facts and in the circumstances of the case, the Tribunal was right in holding that the provisions of Section 104 of the I.T. Act were applicable even to a company which had not declared any dividend?" 2. "Whether on the facts and in the circumstances of the case, the Tribunal was right in holding, in spite of the commitments of the company, that the profits of the assessee-company for the assessment year 1984-85 were not small within the meaning of 'Smallness of profits' in Section 104 (2) of the IT Act and declaration of dividend by the company would have been reasonable?" 2. The Assessing Officer resorted to provision of Section 104(1) of the Act and applied the statutory rate of tax stipulated thereunder on the ground that the....

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....he nature of unsecured loans as well as loans and advances shown on the assets side of the balancesheet, it does not appear to be a sufficient ground for not declaring dividend. It is also not clear as to when loans were required to be repaid. As regards the plea that the profit left with the assessee was very small, we do not find any substance therein because, as we have seen, net profit carried to the profit and loss appropriation account amounted to Rs.3,07,952/-, which cannot be said to be a meager amount for the purposes of declaring dividend." 4. We have heard learned counsel for the parties and perused the record. 5. Section 104 of the Act is reproduced below:- "104 (1) Subject to the provisions of this Section and of sections 10....