Law:

Section:

Section 104 of the Income-tax Act, 1961 [Corresponding to section 23A of the Income-tax Act, 1922] - Additional income-tax on undistributed profits in case of certain companies - Assessment year 1948-49 - Whether in making order under-section 23A, ITO is not bound to find out whether during period that assessee earned profits and also at time when dividends were declared assessee company remained private limited company and he has to only find out whether during year of assessment, with which period alone he was concerned, assessee was private limited company - Held, yes - Assessee-company was incorporated in India shifted its registered Office to Pakistan in June 1947 and was converted into public limited company in July 1947 - Whether in view of aforesaid legal postion, nothing could prevent ITO from applying provision of section 23A of Act, 1922 upon assessee - Held, yes FACTS The assessee was incorporated as a private company. A few months prior to the partition of British India and the setting up of the two Dominions of India and Pakistan, the assessee shifted on 26-6-1947, its registered office from India to Pakistan. Thereafter, on 10-7-1947, the assessee private company converted itself into a public limited company. On 5-8-1948, the annual general meeting of the shareholders of the assessee-company was held at Chittagong and a dividend was declared at that meeting. The ITO found that the dividend declared was less than the statutory percentage of dividend contemplated under section 23A of the Indian Income-tax Act. Accordingly, he made an order, on 16-7-1953 under section 23A(1) of the Act on the assessee-company. On appeal, the AAC directed the ITO to charge to tax only that portion of the dividend which was proportionate to the profits taxed in India. On second appeal, the Appellate Tribunal dismissed the appeal, firstly, on the ground that the ITO was not concerned with the status of the assessee at any time subsequent to the year of assessment but only with its status as a private limited company during the year of assessment, and secondly, on the ground that the language of section 23A itself indicated that what was to be looked into before making…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492