DIPAK KUMAR SEN, J. - (1.) M /s Turner Morrison & Co. Ltd., the assessee, was assessed to income-tax in the asst. yr. 1951-52, the accounting year ending on December 31, 1950. The assessee's total income was computed at Rs. 35,80,067. While computing the tax payable on the said total income, the ITO applied proviso (i) to Paragraph B of Part I of the First Schedule to the Finance Act, 1951. The total income as reduced by 7 annas in the rupee exceeded the amount of the dividend declared and rebate at the rate of 1 anna per rupee was allowed on the amount of such excess. No order was made under s. 23A(1) of the IT Act, 1961. A tax demand for Rs. 7,30,558 was raised and was set off against the tax paid in advance and deducted at source.
(2.) AN appeal was filed against the said assessment before the AAC who reduced the quantum of the total income by an order passed on July 13, 1957. A further appeal was preferred by the assessee against the order of assessment before the Tribunal which by its order dated February 22, 1961, allowed further relief to the assessee and the total income of the assessee was reduced further. When the appeal of the assessee before the AAC was pending, the ITO started proceedings under s. 34 of the Indian IT Act, 1922. On April 20, 1956, an order was passed by the ITO under s. 23(3) r/w s. 34 of the Act of 1922. By the said order, the ITO included in the total income of the assessee a sum of Rs. 8,49,959 as the notional dividend under s. 23A of the Act of 1922 received by the assessee on September 29, 1950. The total income of the assessee was, therefore, enhanced to Rs. 44,30,026. The original total income as assessed remained at Rs. 35,80,067. In the said order, rebate was not allowed under proviso (i) to Paragraph B of Part I of the First Schedule to the Finance Act, 1951.
(3.) BEING aggrieved, the assessee preferred an appeal before the AAC against the supplemental assessment which was dismissed on November 11, 1959.;