Dipak Kumar Sen, J. - (1.) The material facts in, and the proceedings leading up to, this reference are, inter alia, that Calcutta Investment Co. Ltd., the assessee, was assessed to income-tax in the assessment year 1961-62, the relevant accounting year ending on December 31, 1960. In the said assessment year, the income of the assessee was derived from the following sources : (a) Benianship commission ... 5,763 (b) Dividends ... 3,67,808 (c) Income from shareholding ... 1,37,242 (d) Other commission 98,582 (e) Interest on loans ... 2,40,444 (f) Other interest ... 2,054 (g) Speculation profit ... 1,953 (h) Rent ... 57,900
(2.) The assessee was assessed to income-tax on a total income of Rs. 11,17,685 and the tax which was found payable thereon was Rs. 5,02,958. In the said assessment year, the assessee had paid municipal tax aggregating to Rs. 11,738, 50% whereof being Rs. 5,869 was not allowed in the computation of the total income of the assessee.
(3.) On the basis of the aforesaid, the Income-tax Officer found that the assessee had a distributable surplus of Rs. 6,08,858 for the purpose of distribution of dividends. The Income-tax Officer found further that the assessee was an investment company within the meaning of Section 23A of the Indian Income-tax Act, 1922, and as such was required to distribute 90% of its distributable surplus by way of dividends.;