GURDIAL SINGH UPPAL Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Chandigarh Bench, has referred the following questions of law for our opinion :

(2.) 2. The assessment year in question is 1962-63. The assessee is an individual. He was a managing director of the Hindustan Embroidery Mills (Private) Ltd. , Chheharta, Amritsar. He held 16,955 shares in the said company. In his capacity as a managing director, he was actively engaged in the affairs of the company. The board of directors of the company by its report dated 18th December, 1961, made the following recommendation : "we recommend that a sum of Rs. 1,70,000 be reserved for income-tax and out of the balance, dividend amounting to Rs. 1,41,690 at 20 per cent. of the paid up capital be paid to the shareholders. Out of the balance of Rs. 64,690. 85, the sum of Rs. 40,000 be transferred to rehabilitation reserve account. The balance of Rs. 24,690. 85 be carried forward. "

(3.) AT the ordinary annual general meeting of the company, held on 27th January, 1962, the proposed dividend was declared.