COMMISSIONER OF INCOME TAX Vs. JUGANTAR P LTD

JUDGEMENT

(1.) The facts leading up to this reference are, inter alia, as follows : In the assessment year 1963-64, Jugantar Private Ltd., the assessee, was assessed to income-tax on a total income of Rs. 7,21,322, the tax levied being Rs. 3,51,661. In the said year, the assessee distributed as dividend a sum of only Rs. 5,470 which was less than the statutory percentage of the distributable income. The ITO, therefore, held that Section 104 were applicable and accordingly levied additional income-tax at the prescribed rate of 37% on the distributable income of Rs. 3,69,661 as reduced by Rs. 5,470 distributed as dividend.

(2.) Being aggrieved by the said order, the assessee preferred an appeal to the AAC. It was, inter alia, contended in the appeal that in the computa- tion of the distributable surplus an amount of Rs. 3,63,633, being a reserve for gratuity, should have been excluded. The AAC found that the gratuity payable was only Rs. 37,323. Rejecting the contentions of the assessee, he dismissed the appeal.

(3.) The assessee preferred a further appeal before the Income-tax Appellate Tribunal. The Tribunal held that in computing the distributable surplus, inter alia, the gross total income should have been reduced by the following amounts. <FRM>JUDGEMENT_477_ITR127_1981Html1.htm</FRM>