S. P. MITRA, J. - (1.) THE assessee is a private limited company owning properties. THE assessment years are 1955-56 and 1956-57. THE relevant accounting periods are the years ending January 31, 1955, and January 31, 1956, respectively.
(2.) FOR the asst. yr. 1955-56, the assessee's total income was determined at Rs. 16,697. The tax payable thereon amounted to Rs. 7,253. There was a distributable surplus of Rs. 9,444. The assessee did not declare any dividend within the 12 months immediately following the expiry of the previous year but a dividend of Rs. 6,959 was declared on October 15, 1957. For the asst. yr. 1956-57, the total income was Rs. 17,000. The tax thereon was Rs. 7,384. The distributable surplus was Rs. 9,616. Here again no dividend was declared within twelve months immediately following the expiry of the previous year and a dividend of Rs. 6,959 was declared on October 15, 1957. The ITO invoked the provisions of s. 23A(1) and levied an extra super-tax under that section on the distributable surplus which amounted to Rs. 9,444 in the first year and Rs. 9,616 in the second year. His view was that distribution of dividends by the company after the expiry of the prescribed period, i.e., the 12 months immediately following the end of the previous year, was not distribution in terms of s. 23A(1).
(3.) THE AAC agreed with the ITO. But another argument was advanced before the AAC, namely, that even before the statutory period had expired, the directors of the company had received advances from the company, which were to be treated as dividends within the meaning of s. 2(6A) (e). THE AAC refused to entertain this argument as it involved investigation of facts. Before the Tribunal various points were urged. It is not necessary to refer to all of them inasmuch as learned counsel appearing for the assessee has confined himself mainly to two points. The first point relates to the advances made by the company to its own shareholders, and the second point to the deduction of dividends already distributed from the amounts estimated as deemed dividends by the IT authorities.;