Sankar Prasad Mitra, J. - (1.) This is a reference under Section 66(1) of the Indian Income-tax Act, 1922. The assessment year is 1959-60. The previous year ended on the 31st August, 1958. The Income-tax Officer, while making the assessment for the year 1956-57, found that the assessee had issued bonus shares to the extent of Rs. 3,58,800 and had also declared dividend to the extent of Rs. 44,944. He held that in terms of the Finance Act of 1956, the gross of corporation tax payable on the total income would be Rs. 43,460.25. He said that out of this sum a rebate @ 0-4-0 annas per rupee was allowable ; but this rebate had to be reduced in respect of the bonus shares issued @ 0-2-0 annas per rupee and also of the excess dividend over 6 per cent. @ 0-2-0 annas per rupee. In these premises, the Income-tax Officer computed the reduction in rebate at Rs. 45,973.62 and held that there was no unabsorbed reduction in rebate amounting to Rs. 20,219.37.
(2.) Again, while he was assessing the income for 1957-58, the Income-tax Officer worked out the rebate at Rs. 11,487.90 (@ 30%) under the Finance Act, 1957. He, thereupon, determined the unabsorbed reduction of rebate at Rs. 8,731.10 after taking into consideration the unabsorbed reduction of 1956-57.
(3.) In the assessment year 1958-59 the question of set-off of rebate did not arise as there was a net loss of Rs. 37,046.;