Judgment

SHAH, J. : M/s. East Coast Commercia1 Company Ltd., - hereinafter called the Company-disclosed in its return for the assessment years 1950-51 and 1951, a consolidated net profit of Rs. 8,89,241 for the account period April 7, 1949 to July 16, 1950. The Income-Tax Officer computed the income of the Company for the assessment year 1950-51 at Rs. 7,27,824 and for the assessment year 1951-52 at Rs. 2,00,803. It came to the notice of the Income-tax Officer that the Company was one in which the public were not substantially interested within the meaning of S. 23-A of the Income-tax Act, 1922, and that the distributable profit after deducting tax due on the total income was Rs. 4,32,151 for the assessment year 1950-51, and Rs. 1,13,579 for the assessment year 1951-52 and that the Company had distributed Rs. 43,910 only as dividend. The Income-tax Officer commenced proceedings under S. 23-A of the Income-tax Act, 1922 and passed an order that the undistributed portion of the assessable income of the Company as computed for income-tax purposes and reduced by the amount of income-tax and super-tax shall be deemed to have been distributed as dividends among the shareholders. The orde