Judgement

SUBBA RAO, J. : Kesoram Industries and Cotton Mills Limited, the appellant herein, is a company incorporated under the Indian Companies Act. Its subscribed capital at the end of the relevant accounting year ending March 31, 1957, was Rupees 2,29,99,125. The original cost of the said assets was Rs. 2,30,32,833. During the year ended March 31, 1950, the company made a revaluation of its assets and added an amount of Rs. 1,45,87,000 to the cost of the said fixed assets. After certain adjustments, the value of the fixed assets was fixed at Rs. 2,60,52,357. The said fixed assets of the assessee were shown in the balance-sheets issued by the assessee from time to time at the added value less depreciation calculated on the original cost. In the balance-sheet of the relevant accounting year also the said amount was shown as the value of the fixed assets. In the profit and loss account for the said year a sum of Rs. 15,29,855 was shown as the amount of dividend proposed to be distributed for that year. The said amount was declared as dividend at the General Body Meeting of the assessee held on November 27, 1957. The said balance-sheet as on March 31, 1957, also showed a provisions