Dipak Kumar Sen, J. - (1.) In this Reference under Section 256(1) of the Income-tax Act, 1961 at the instance of the Commissioner of Income-tax the question which arises for determination is whether the assessee Eastern Equipment and Sales Limited, in the assessment year 1962-63, came within the mischief Section 104 of the Act.
(2.) The facts admitted and/or found are that the assessee is a limited company in which two other limited companies, namely, Messrs. Western Bengal Coal Fields Limited and Messrs. Central India Coal Fields Limited held 80% of the shares at the material time. The shareholders of the said two-holding companies were, inter alia, the Unit Trust, some Scheduled Banks, the Life Insurance Corporation and other Insurance Companies. A list of the share-holders ' in the said two holding companies has been annexed to the statement of case being annexure "A".
(3.) In the assessment year in question the assessee had declared only Rs. 22,500/- as dividend, whereas if Section 104 of the Income-tax Act, 1961 was applicable the assessee should have declared 60% of its distributable surplus, namely, Rs. 60,737/-;