Sankar Prasad Mitra, J. - (1.) This is a reference under Section 66(1) of the Indian Income-tax Act, 1922. The assessee is a private limited company. Its shares were held by the members of the Nawn family. Its main source of income was from property assessed under Section 9 of the Act in the relevant years. There is no dispute that the provisions of Section 23A of the Act are applicable to the assessee.
(2.) The facts relevant for our purposes to invoke the provisions of Section 23A in the assessment years under consideration are as follows : JUDGEMENT_300_ITR86_1972Html1.htm
(3.) Now, Section 23A gives power to the Income-tax Officer to assess companies to super-tax on undistributed income in certain cases. Explanation 2 to the section prescribes the different statutory percentages in the cases of different classes of companies. A company in order to avoid the liability to pay the super-tax envisaged by Section 23A has to declare dividends at the appropriate statutory percentage of the total income as reduced by taxes referred to in Section 23A(1). According to Explanation 1, in the case of a company " whose business consists wholly or mainly in the dealing in or holding of investments ", the prescribed percentage is 100. If, however, this provision does not apply, the percentage prescribed would be not 100 but 60.;