1984 (11) TMI 89

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....come-tax Act, 1961 (' the Act '). The assessee is a private limited company. In the previous year ended 30-6-1977, relevant to the assessment year 1978-79, the assessee had made a book profit of Rs. 24,577. But, after setting off the loss of the previous year amounting to Rs. 30,084, the assessee had no distributable income for declaring any dividend. However, while making the assessment the ITO t....

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....ntion of the assessee that it was an industrial company and, therefore, section 104 cannot be applied. He also brushed aside the contention that factually the assessee had no distributable income. 2. in the appeal before us, it was contended on behalf of the assessee that when on actual facts the assessee had no distributable income, an order under section 104 could not be passed on the basis of....

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....nce with the provisions of the Act before making any deduction under Chapter VI-A of the Act. If we follow the letter of these definitions, it would seem that the computation made by the ITO was correct. But we cannot ignore the fact that while determining the gross total income, the ITO has added back an expenditure which was actually incurred by the assessee, thus, artificially increasing the in....