Deb, J. - (1.) The following questions are involved in this reference under Section 66(1) of the Indian I.T. Act, 1922 : "(1) Whether, on the facts and in the circumstances of the case, the assessee-family was precluded, by virtue of the second proviso to Section 30(1) of the Indian Income-tax Act, 1922, from objecting to the inclusion in its total income of the sum of Rs. 26,708 in the appeal filed by it against its own assessment made in the status of a Hindu undivided family ? (2) In case the answer to the first question be in the negative, whether on the facts and in the circumstances of the case, the Tribunal was justified in excluding from the total income of the assessee-family the sum of Rs. 26,708 being half of the dividends deemed to have been distributed to the firm of M/s. Banshidhar Durgadutt by operation of Section 23A ? "
(2.) The assessee is an HUF. Its karta was one Durgadutt Bhagat. After his death the name of his widow, Sm. Siksha Devi Bhagat, was substituted as the appellant before the AAC. Durgadutt was a partner in the firm of M/s. Banshidhar Durgadutt having a half share tharein. The firm of Banshidhar Durgadutt held a number of shares in two companies, viz., M/s. Bhagat Land Development Co. and M/s. Dhanlakshmi Trading Corporation Ltd.
(3.) Acting under Section 23A of the Indian I.T. Act, 1922, the ITO made an order declaring that the undistributed profits of the aforesaid two companies should be deemed to have been distributed as dividends to its shareholders in view of the unamended provisions which were then in force. Thereafter, the ITO acting under Section 34(1)(b) taxed the assessee in respect of the half share of Durgadutt relating to the deemed dividend deemed to have been received by the said firm.;