COMMISSIONER OF INCOME TAX Vs. BOMBAY PHOTO STORES PVT LTD

JUDGEMENT

(1.) The statement of the case raises the following two points for an answer :

(2.) Whether, on the facts and in the circumstances of the case, the shortfall in the distribution of dividend by the assessee was less than 5 per cent. of the total income as reduced by the amounts mentioned in Section 23A(1) of the said Act, and the assessee as such was entitled to a notice under Section 23A(2)(ii) thereof ? "

(3.) The statement of the case also makes it clear that the assessee carried on two activities : (1) developing and printing, and (2) trading. The Income-tax Officer adopted 50 per cent. in respect of the first part and 65 per cent. in respect of the second part of the business and this resulted in the average statutory percentage 57'5 per cent. The assessee's contention then was that having declared a dividend of Rs. 20,295 in March, 1960, when the statutory percentages were 45 per cent. and 60 per cent., respectively, for these two activities, the average would be only 52.5 per cent. In fact the assessee claimed to be entitled to be given an opportunity for declaring additional dividends. The Appellate Assistant Commissioner negatived the contention and held that the statutory percentages would be 50 per cent. and 65 per cent. as enacted by the Finance Act of 1959 and therefore the assessee was not entitled to an opportunity to declare additional dividends. It was further held by the Appellate Assistant Commissioner that further distribution of dividends was not impossible. In the result, the Appellate Assistant Commissioner upheld the Income-tax Officer's order under Section 23A.