M A ISPAHANI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference under s. 66(1) of the Indian IT Act.

(2.) THE assessment year involved is the year 1949-50, the relevant accounting year being the year ended on December 31, 1948. THE question referred to this Court is :

(3.) NOW, the date of the annual general meeting of M. M. Ispahani Ltd., being August 5, 1948, the undistributed portion of the assessable income of M. M. Ispahani Ltd. (reduced under the provisions of s. 23A) which was deemed to have been distributed as dividend became assessable if at all, in the hands of the shareholders, including the assessee, in the asst. yr. 1949-50. Since the assessment of the assessee for that year had already been completed, a notice under s. 34(1)(b) of the Indian IT Act was issued to the assessee, on March 18, 1954, shortly after the making of the order under s. 23A. The assessee did not pay any heed to the notice. The ITO, therefore, completed the assessment, in s. 34 proceeding by recourse to s. 23(4) of the Indian IT Act and added back a sum of Rs. 3,39,937 to the income of the assessee.