HUNGERFORD INVESTMENT TRUST LIMITED Vs. INCOME TAX OFFICERS

JUDGEMENT

(1.) The appellant, M/s. Hungerford Investment Trust Ltd. was, at all material times, a non-resident company having its registered office at Singapore. The appellant-company owned 100% shares in M/s. Turner Morrison and company Ltd. which was a company incorporated in India. The present appeals are concerned with assessment years 1949-50, 1950-51 and 1951-52.

(2.) An order under Section 23A of the Income-tax Act, 1922, before its amendment in 1955 was passed by the Income-tax Officer in the case of M/s. Turner Morrison and Company Ltd. as a result of which the undistributed portion of the assessable income of M/s. Turner Morrison and Company Ltd. was deemed to have been distributed as dividends among its shareholders for assessment years 1949-50, 1950-51 and 1951-52. The dividend deemed to have been so received by the appellant-company as shareholder for the assessment years 1949-50, 1950-51 and 1951-52 was sought to be subjected to income-tax by the Income-tax Officer under Section 34 of the Income-tax Act, 1922. In the past an assessment had been made on M/s. Turner Morrison and Company Ltd. as agents for the appellant-company on a total income which was returned as nil. In view of the above order under Section 23A, the Income-tax Officer sought approval of the Commissioner of Income-tax under Section 34 to tax the appellant-company as an assessee in respect of assessment years 1949-50, 1950-51 and 1951-52.

(3.) After obtaining approval of the Commissioner of Income-tax under Section 34, the Income-tax Officer issued a notice for the assessment year 1949-50 to M/s. Turner Morrison and Company Ltd. as agents of the appellant-company on 24-3-1954. A return was filed pursuant to the notice by M/s. Turner Morrison and Company Ltd. as agents of the appellant-company for the assessment year 1949-50. The status of the company in the return was described as non-resident and the income was the dividend deemed to be received under Section 23A by the appellant-company from M/s. Turner Morrison and Company Ltd. on 29-10-1954, the Income-tax Officer made an assessment and issued a demand notice on M/s. Turner Morrison and Company Ltd. as agents of the appellant non-resident company.