COMMISSIONER OF INCOME TAX Vs. CHEMAUX PVT LIMITED

JUDGEMENT

(1.) 1. In this departmental reference made under section 256(2) of the Income -tax Act, 1961, pertaining to the assessee's assessment year 1962 -63, the Income -tax Appellate Tribunal has referred to us the following questions of law for our opinion : '1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that secret commission, although disallowed in assessment proceedings for want of proof, has to be duly considered while making an order under section 104 ?

(2.) WHETHER , on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee has distributed dividends in excess of the one prescribed under section 104 of the Act ?

(3.) SECTION 109(i) (g) and (iv) read as follows : '(i) 'distributable income' means the gross total income of a company as reduced by - ..... (g) any expenditure actually incurred for the purpose of the business, but not deducted in computing the income chargeable under the head 'Profits and gains of business or profession' being, - (1) a bonus or gratuity paid to an employee, (2) legal charges, (3) any such expenditure as is referred to in clause (c) of section 40, (4) any expenditure claimed as a revenue expenditure but not allowed to be deducted as such and not resulting in the creation of an asset or enhancement in the value of an existing asset.' '(iv) 'gross total income' means the total income computed in accordance with the provisions of this Act before making any deduction under Chapter VI -A.'