COMMISSIONER OF INCOME TAX Vs. KERALA BALERS LIMITED

JUDGEMENT

(1.) A common question arose in relation to the assessments for years 1962-63 and 1963-64 of M/s. Kerala Balers Ltd., Alleppey. This was disposed of by a common order by the Income-tax Appellate Tribunal, Cochin Bench, and that Tribunal has referred the following question to this court :

(2.) THE statutory minimum dividend applicable to the company is agreed to be 60 per cent. mentioned in section 109(4)(b) of the Income-tax Act, 1961. It is also an agreed fact that for the relative accounting periods for the two assessment years which ended respectively on December 31, 1961, and December 31, 1962, this statutory minimum of 60 per cent. required by the above section had not been declared by the company as dividend. An order was, therefore, passed by the Income-tax Officer under section 104 of the Income-tax Act, 1961 (hereinafter referred to as "the Act"). This order though confirmed by the Appellate Assistant Commissioner in appeal was not aside by the Tribunal and the question is whether the Tribunal was justified in holding that in the circumstances in which assessee-company was placed it was unreasonable to insist that the company should have paid higher dividend than it declared in relation to the two years.

(3.) THE Tribunal accepted the contentions of the assessee and held that it is unreasonable to insist that the assessee should have distributed higher amounts than Rs. 28,000 and Rs. 48,000 actually distributed by way of dividends for the two years 1962-63 and 1963-64. THE question is whether the view of the Tribunal is erroneous at law.