DIPAK KUMAR SEN, J. - (1.) S . B. Electric Mart (P) Ltd., the assessee, was assessed to income-tax in the asst. yr. 1964-65, the relevant accounting year ending on December 31, 1963. The assessee had declared a dividend of Rs. 5,625 in the said year.
(2.) THE ITO computed the total assessable income of the assessee in the said assessment year to be Rs. 1,93,835. He found that after deduction from the said total income the assessed tax and donation under s. 88 of the IT Act, 1961, there was a distributable surplus in the hands of the assessee of Rs. 76,783. The ITO also ascertained the commercial profit of the assessee for the said assessment year as follows : Taking the profit shown in the books of account of the assessee at Rs. 11,285 the ITO added to the said amount the sum of Rs. 38,000 on account of unexplained cash credit, Rs. 310 as interest paid on such deposits plus a sum of Rs. 86,318 aggregating to Rs. 1,35,913. The ITO deducted Rs. 1,16,051 from the said Rs. 1,35,913 as tax assessed and found that the commercial profit in the hands of the assessee was Rs. 19,862. The ITO noted that the assessee had declared a dividend of only Rs. 5,625 in the said assessment year and held that under s. 104 of the IT Act, 1961, the assessee was required to declare 60 per cent of the surplus as dividend which the assessee had failed to do.
(3.) THE ITO, therefore, imposed an additional super-tax at the rate of 37 per cent on the distributable income, namely, Rs. 76,783, as reduced by the dividend declared. Such additional super-tax was assessed at Rs. 26,328.46.;