Judgment

SARKARIA, J. - Whether any payment by a Company not being a company in which the public are substantially interested within the meaning of Section 23A, of any sum by way of advance or loan to a shareholder, not exceeding the accumulated profits possessed by the Company, is to be deemed as his dividend under Section 2 (6A) (e) read with Section 12 (1B) of the Income-tax Act, 1922, even if that advance or loan is subsequently repaid in its entirety during the relevant previous year in which it was taken is the only question that falls to be determined in this appeal by special leave.

2. The assessment year is 1957-58 and the corresponding previous year is the calendar year 1956. The assessee is a shareholder and the Managing Director of M/s. Dolaguri Tea Co. (P) Ltd. The Company is admittedly one in which the public are not subsantially interested within the meaning of Section 23A of the Indian Income-tax Act, 1922 (for short, the Act). At the commencement of the previous year, there was in the books of the Company a credit balance of Rs. 65,246/- in the assessees account, which had been brought forward from the earlier year. Between the 11th January and the 12th November, 19