Judgment

SHAH, J.: The Allahabad Bank Ltd. is a public limited company. The paid up share capital of the Company other than capital entitled to a dividend at a fixed rate was at the relevant time Rs. 30,50,000. The Company had issued before January 1, 1954, shares at premium and the premium received in cash aggregated to Rs. 45,50,000. In each of the account years 1955 and 1956 the Company distributed Rs. 5,49,000 as dividend.

2. In proceedings for assessment for each of the assessment years 1956-57 and 1957-58 the Income-tax Officer reduced by Rs. 61,000 the rebate in super-tax admissible under the Finance Act 1956 on the view that the Company had distributed dividend exceeding 6% of its paidup capital. In reducing the rebate the Income-tax Officer did not take into consideration share premium amounting to Rs. 45,50,000 received by the Company.

3. The Appellate Assistant Commissioner held that the Company s share premium was liable to be added to the capital of Rs. 30,50,000 in computing the reduction in the rebate in super-tax, and directed modification of the order of assessment. The Appellate Tribunal agreed with the Appellate Assistant Commissioner.

4. The Tribunal then submitted