Datta, J. - (1.) This reference relates to the application of the provisions for rebate contained in Paragraph D of Part II of the Finance Act, 1956.`
(2.) On 30th December, 1954, the assessee-company passed several resolutions relating to the capital structure of the company including a resolution relating to the issue of fully paid-up bonus shares.
(3.) The assessee-company in its return for the assessment year 1956-57 corresponding to the accounting year 1955 claimed a rebate on account of the issue of bonus shares and the increase in the paid-up capital consequent upon the issue of bonus shares. The Income-tax Officer held that the rebate on the face value of the bonus shares is to be reduced in the year when these shares are issued by the company to its shareholders. In the accounting year 1955 only a resolution for increase of capital by issue of new shares was passed. The passing of the resolution in the accounting year did not tantamount to the issue of bonus shares to the shareholders. He further held that Clause (b) of the said resolution makes it patent that the shares were not issued in the accounting year ended 31st December, 1955, and, accordingly, he disallowed the rebates claimed.;