MOORE AVENUE PROPERTIES P LTD Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE assessee is a private limited company owning properties. THE assessment years are 1955-56 and 1956-57. THE relevant accounting periods are the years ending January 31, 1955, and January 31, 1956, respectively.

(2.) FOR the asst. yr. 1955-56, the assessee's total income was determined at Rs. 16,697. The tax payable thereon amounted to Rs. 7,253. There was a distributable surplus of Rs. 9,444. The assessee did not declare any dividend within the 12 months immediately following the expiry of the previous year but a dividend of Rs. 6,959 was declared on October 15, 1957.

(3.) THE AAC agreed with the ITO. But another argument was advanced before the AAC, namely, that even before the statutory period had expired, the directors of the company had received advances from the company, which were to be treated as dividends within the meaning of s. 2(6A) (e). THE AAC refused to entertain this argument as it involved investigation of facts.