The technical meaning of 'profits and gains' does not limit it to business profits and gains, and the assessable income of a company derived from property would be the notional income of the property held by the company, even if it is unrealizable or not realized.

( 1 ) THIS is a reference under section 66 (1), Income-tax Act and arises out of orders under section 23-A (1) of the Act for the assessment years 1941-42 and 1942-43.

( 2 ) THE assessee is Kilburn Properties Limited Calcutta; the only source of income of the company is house property.

( 3 ) THE assessable income of the company for 1941-42 was Rs. 34,772 and the income-tax payable was Rs. 10,141-13/- only leaving a balance of Rs. 24,630-3/- available for distribution as dividends. The general meeting of the company was held on 6-6-1941. No dividend was declared.

( 4 ) IN the profit and loss account the company showed Rs. 31,331/- as depreciation allowance on the original cost of Rs. 1,19,002/- only and thus the profits were shown as Rs. 55-2-6 only.

( 5 ) THE Income-tax Officer thought that the company should have declared 60 per cent of the assessable income less tax as dividend and made an order in terms of section 23-A (1) of the Act.

( 6 ) DURING the assessment year 1942-43 the assessable income was Rs. 35,847/- and the tax payable was Rs. 11,762-6-0 and the balance of Rs. 24,084-10/- was available for distribution as dividend. The general meeting was held on 28-5-1942 but no dividend was declared. The company debited Rs. 31,472 as depreciation allowance and the profits were shown as Rs. 65-8-2 only.

( 7 ) THE Income-tax Officer made a similar order under section 23-A (1) of the Act in this year also.

( 8 ) ON appeal by the assessee the Appellate Assistant Commissioner held that notional income under section 9 of the Act was not included in section 23-A and set aside the orders of the Income-tax Officer for both years.

( 9 ) APPEALS were taken by the Income-tax Officer to the Income-tax Appellate Tribunal who reversed the orders of the Appellate Assistant Commissioner and restored the orders of the Income-tax Officer.

( 10 ) ON application filed by the assessee under Section 66, Income-tax Act the Tribunal referred the following question for toe opinion of this Court. "whether in view of the fact that the entire income of the assessee was derived from 'property' assessable under section 9, Income-tax Act, the provisions of section 28-A were at an applicable to the case?"

( 11 ) THE relevant portion of section 23-A reads as follows:"where the Income-tax Officer is satisfied that in respect of any previous year the profits and gains distributed as dividend by any company. . . . . . . . are less than 60 per cent of the assessable income of the company as reduced by the amount of income-tax and super-tax payable. . . . . . . . he shall make. . . . . . . . . an order in writing that the undistributed portion of the assessable income of the company of that previous year as computed for income-tax purposes and reduced by the amount of income-tax and super tax payable by the company in respect thereof snail be deemed to have been distributed as dividends amongst the share-holders as at the date of the general meeting aforesaid, and thereupon the proportionate share thereof of each share-holder shall be included in the total income of such share-holder for the purpose of assessing his total income. "

( 12 ) MR. Mitter, learned counsel appearing for the assessee contended that the words 'profits' used in section 23-A (1) have reference to a company carrying on business and cannot apply to a company whose only source of income is derived from property, He, therefore, submitted that the question referred to this Court should be answered in the negative.

( 13 ) IN our opinion, this contention cannot be accepted for the following reasons:

( 14 ) IT would appear from a resume of the Act that the expression 'profits and gains' is not limited to business only, it has been used in other cases also. Again the word income and not profits and gains has been used in case of business, see Sections 2 (6-A), 4 (3) (1-a), 4 (3) (iii), 10 (iv), 23 (A), 24 (1), 24 (2 ). We may particularly refer to section 24 (1), 24 (2) whic