SUNDARAM CO PRIVATE LIMITED MADURAI Vs. COMMISSIONER OF INCOME TAX MADRAS

JUDGEMENT

(1.) THE following judgment of the court was delivered by :-

(2.) IN Sundaram and Company (Private) Ltd.-hereinafter called 'the Company'-the public are not substantially interested within the meaning of S. 23A of the INdian INcome-tax Act, 1922. IN dealing with the assessment of income of the Company for the assessment years 1946-47 to 1951-52, the INcome-tax Officer, central Circle, Madras, passed orders under s. 23A of the INcome-tax Act, 1922, and directed that the total income of the Company as determined in the years of assessment less tax payable be deemed to have been distributed amongst the shareholders of the Company as on the relevant dates of the General Body Meetings. The following table sets out the relevant details <FRM>JUDGEMENT_124_AIR(SC)_1968Html1.htm</FRM> On 6/07/1955 the Company in a general meeting resolved that the amount of Rs. 3,54,716.00 which was under the orders of the INcome-tax Officer deemed to have been distributed as ;dividend amongst the shareholders pursuant to orders under s. 23A of the INcome-tax Act, be distributed as dividend to the shareholders, and in pursuance of that resolution proportionate part of the dividend due to each shareholder was credited to his account.

(3.) THE Commissioner of Income-tax appealed to the Income-tax Appellate tribunal. He, contended that in the circumstances of the case the amount of Rs. 3,54,716.00 was liable to be taken into consideration for the purpose of withdrawing the rebate of supertax admissible under the Finance Act, 1956. THE tribunal held that the case of the Company 'did not fall within any of the situations contemplated by s. 34(1)(b)' and the Company's income had not been the subject of excessive relief as the rebate of super-tax originally granted was out of the tax otherwise computable and not from the assessed income. But the tribunal confirmed the order of the Appellate Assistant Commissioner directing that Rs. 77,600.00 be taken into account in withdrawing rebate of super-tax. <PG>126</PG>