1978 (3) TMI 43

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.... West Bengal-I, Calcutta. Under s. 66(1) of the Indian I.T. Act, 1922, the Tribunal has drawn up a case and referred the following question: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that there was no occasion to impose any additional super-tax under section 23A of the Indian Income-tax Act, 1922 ?" The facts found are, inter alia, that in....

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....rocessing of goods and, secondly, that its liability to additional tax for earlier years should also be taken into consideration in determining the reasonableness of the dividend declared. The ITO did not accept the contentions of the assessee and levied additional super-tax. On appeal, the AAC sustained the order passed by the ITO. In a further appeal to the Tribunal, the assessee contended th....

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....ount of dividend declared was not less than the statutory percentage. The assessee's appeal was allowed. In proceedings under s. 23A, the ITO has to consider first whether the profits and gains distributed as dividend by a company had been less than the statutory percentage of the total income of the company reduced by the amount of income-tax and super-tax payable thereon. If the dividend decl....

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....TR 816 and further laid down that the directors of the company in declaring dividends are expected to act as hardheaded businessman and if they have reasonable grounds for not declaring any dividend, it would not be open to the ITO to constitute himself as a "super-director". In the instant case, admittedly, there was sufficient material for the ITO to initiate proceedings under s. 23A inasmuch....