In our opinion, there is considerable force' in the contention of Mr. Dudhiya. Going by a strict interpretation of the language of the provisions relied on by Mr. G. B. Pai, his argument, .no doubt, looks attractive. But from the other proceedings, to which we will refer immediately, it will be seen that the approach made by the Tribunal is correct. In the Schedule to the balancesheet as on September 30, 1964, the appellant Company has shown a sum of Rs. 1,23,00,000 as General Reserve. It has further shown a sum of Rs. 43,68,000 as the amount trans.ferred to appropriation account for payment of dividend subject to tax in respect of the previous year, namely, 1962-63. It has also shown a sum of Rs. 63,00,000 as added to the General Reserve durillg the year ended Septembr 30, 1964. On December 5, ' 1964, a notice was issued regarding holding of the Annual General Meeting on February 12, 1965. One of the items in the agenda for the said meeting was to declare dividend. It is further stated in the said notice that the dividend to be declared at the meeting will be payable on or before March 9, 1965, to those members whose names are on the Company's Register of Members as on February 12, I 965. In the Directors' Report accompanying the notice, it is stated that a sum of Rs. 43,68,000 has been appropriated "for payment of dividend for the previous year" (Qaid during the year). The reference to the "previous year" obviously is to the accounting year ended September 30, 1964. It is also clear that the amount,so appropriated for payment of dividend is to be paid "during the year" namely, 196465. It is also stated that this amount for payment of dividend has been transferred from the General Reserve. The notice further states that the Directors recommend payment of dividend for the year ended September 30, 1964 at 12% subject to' deduction of tax at the appropriate rate and that the said payment will absorb Rs. 43,68,000, out of the General Reserve.
