( 1 ) BY this reference under Section 66 (1) of the Indian Income-tax Act, 1922, the Tribunal has referred the following question to this court :"whether, on the facts and circumstances of the case, the Tribunal were justified in confirming the order made by the Income-tax Officer under Section 23a (1) of the Indian Income-tax Act, 1922, for the assessment year 1959-60 ?"

( 2 ) THE facts leading to this reference are shortly as follows : The assessee is a private limited company and is admittedly a company in which the public are not substantially interested within the meaning of the Explanation to Section 23a (9) of the Act. For the assessment year 1959-60, for which the previous year was the financial year ending on the 31st March, 1959, the profits according to the assessee's books of account amounted to Rs. 17,269. After providing for liability for taxation of Rs. 8,537 there was a balance of Rs. 8,732. But in the assessment for that year the assessee was assessed to a total income of Rs. 27,742 on which the tax payable was Rs. 14,383 leaving a balance of Rs. 13,359. At its general meeting held on the 29th September, 1959, the assessee-company declared a dividend