Summary
In assessment proceedings for the year 1949-50 the, respondents claimed that certain dividend distributed to them by a company was exempt from tax as the fund out of which it was distributed represented capital gains and not
"accumulated profit" of the company. The Income-tax Officer rejected the claim, but the Appellate Assistant CommissiOner held that a part of the total amount distributed represented capital gains and not being dividend within the meaning of s. 2(6A) of the Income-tax Act, 1922, the share distributed to the share-holders out of that amount was exempt from income tax. This order was reversed in appeal by the Tribunal but the High Court, on a reference, held in favour of the assessee.On appeal to this Court,HELD: Dismissing the appeal: The proviso to the explanation to s. 2(6A)(a) clearly enacted that capital gains arising after March 31, 1948 are not liable to be included within the expression "Dividend". Although the definition of dividend in s. 2(6A) is an inclusive definition and a receipt by share-holders which does not fall within the definition may, in some circumstances, regarded as dividend within the meaning of the Act, it is difficult on that account to hold that capital gains excluded from the definition of dividend by express enactment still fall within the charge of tax. According to the definition in s. 2(6A) only the proportionate share of the member out of the accumulated profits (excluding capital gains arising in the excepted period) distributed by the company alone will be deemed the taxable component. [667 D]See the full content of this document
Extract
Commissioner Of Income-tax, Calcutta VS. Nalin Behari Lal Singha Etc.
PETITIONER: COMMISSIONER OF INCOME-TAX, CALCUTTA Vs.RESPONDENT: NALIN BEHARI LAL SINGHA ETC.DATE OF JUDGMENT: 25/07/1969BENCH: SHAH, J.C. (CJ)BENCH: SHAH, J.C. (CJ)RAMASWAMI, V.GROVER, A.N.CITATION: 1970 AIR 388 1970 SCR (1) 665 1969 SCC (2) 310CITATOR INFO : F 1971 SC2375 (5)F 1992 SC1495 (37)ACT: Income...
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