Judgment

SHAH, J.: Atherton West and Company Ltd. Kanpur, was a company in which at the relevant time "the public " were not "substantially interest within the meaning of S. 23A of the Indian Income-tax Act 1922. At the general meeting of the Company held on April 22, 1939, the Company failed to dividend to the extent of 60% of the assessable income of the Company of its previous year as reduced by the amount of income-tax and super tax payable by the Company in respect thereof. The Income-tax Officer by order dated November 18, 1940, ordered in exercise of the power under S. 23A of the Indian Income-tax Act, as then in force, that an amount of Rs. 3,32,69l/- shall be deemed to be distributed among the shareholders as on the date of the general meeting of the Company. On December 12, 1941, the Income-tax Officer determined the shares of the different shareholders to whom the income was deemed to be distributed but gave no effect to the order by including the proportionate shares in the amount of the deemed income in the individual assessments of the shareholders for the appropriate assessment year. On April 24, 1942 the Company in a general meeting resolved to make available out of