SRINIVASAN J.

This is a consolidated reference and a common statement of the case has been submitted by the Tribunal under section 66(1) of the Act. The five assessees whose cases have given rise to the question are directors and shareholders in Kasturi and Sons Private Ltd. During the account year ended on 31st of March, 1956, relevant to the assessment year 1956-57, the assessees were employed in various capacities in the company for which they were paid salaries and allowances. These assessees had each what is called a current account in the books of the company. It is common ground that they used to draw from the funds of the company various amounts for their private purposes and also pay into this current account amounts by way of cash. During the year, the balance was fluctuating either in favour of or against the assessees. The company is not one in which the public is substantially interested within the meaning of section 23A. In the orders of assessment, the Income-tax Officer proceeded to assess the assessees on the amounts debited against the assessees as at the end of the year, purporting to do so by reason of the definition of " dividend " as it occurs in se