Judgment

HIDAYATULLAH, J. : The Raghuvanshi Mills Ltd., Bombay (a public limited company), has filed this appeal by special leave against the judgment and orders of the High Court of Bombay dated March 10, 1953, and September 1, 1955. By the first order, the Bombay High Court directed the Income-tax Tribunal to submit a supplementary statement in the case in the light of its judgment, giving the parties liberty to lead further evidence, if any. By the second order, the High Court re-framed the question, and answered it against the assessee.

2. The assessee Company s issued & subscribed capital was, at the material time, Rs. 10,00,000/- divided into 10,000 share of Rs. 100/- each prior to November 14, 1941, one Maganla Parbhudas, who was a Director of the Company, held 6,344 shares. On November 14, 1941, he made a gift of 1000 shares to each of his five sons, Ravindra, Surendra, Bipinchandra, Hareshchandra and Krishnakumar. We are concerned with the account year of the Company, April 1, 1942, to March 31, 1943, the assessment year being 1943-44. In that year, the dividend which was declared at the Annual General Meeting held on December 17, 1943, was less than what was required under