( 1 ) THE following questions are involved in this reference under the Income-tax Act, 1922 :" (I) Whether, on the facts and in the circumstances of the case, the Tribunal should have held that the payment of a larger dividend than that declared by the assessee would have been unreasonable ? (2) If the answer to the first question is in the negative, whether the Tribunal was justified in holding that in determining the distributbale surpuls, only the net tax payable by the assessee should be taken into consideration without any regard to the credit given under Section 18 (5) of the Indian Income-tax Act, 1922 ?"

( 2 ) THE assessee is a private limited company to which Section 23a of the Act applies. The assessment year is 1954-55. The previous, year ends on December 31, 1953. The total income was determined at Rs. 2,15,825. The tax payable thereon, after deducting the amount treated as tax paid under Section 18 (5), was found to be Rs. 45,297. In the general meeting held on March 31, 1955, the assessee declared a dividend of Rs. 60,000 which was short of 60% of the distributable surplus and, therefore, the tax officer was invested with jurisdiction to take action under Sec