COMMISSIONER OF INCOME TAX Vs. RAMANAND SACHDEVA

JUDGEMENT

(1.) THIS reference by the CIT under S. 66(1) of the Indian IT Act, 1922, raises certain interesting questions but after hearing both the counsel we have come to the conclusion that these questions do not arise at this stage and that the reference in respect thereof is somewhat premature. The circumstances in which the reference arises may now be stated.

(2.) M /s Allied Publishers and Stationery Manufacturers Ltd. (hereinafter referred to as "the company") distributed a dividend during the financial year 1955 -56. 262 shares of the company stood in the name of Shri Ramanand Sachdeva (hereinafter referred to as "the individual"). Ramanand Sachdeva, however, was also the Karta of a Hindu joint family (hereinafter referred to as "the family"). The individual had received from the company certain emoluments amounting to Rs. 28,879 and a dividend of Rs. 13,160.

(3.) SUBSEQUENTLY , some time in 1961, another ITO took up the assessment of the family for the same assessment year. In these proceedings, he came to the conclusion that the salary income received by the individual constituted the income of the family in view of the decision of the Supreme Court in the case of Kalu Babu Lal Chand (1959) 37 ITR 123 (SC). He also came to the conclusion likewise that the dividend income was also to be assessed in the hands of the family. However, he pointed out that as the credit for the "tax deducted at source" of Rs. 4,605 had been given in the individual assessment (Rs. 4,681 was the figure in the individual assessment) and as no dividend warrant had been filed by the family, credit for the said amount of difference between the gross and net dividends could not be given in the assessment of the family. In addition to the above two items, there was a business loss of Rs. 6,786 which had to be set off. There was also a slight difference in the figures of salary income and dividend income between the figures taken in the hands of the individual and those considered in the family assessment as already pointed out. The family assessment was, therefore, completed on a total income of Rs. 39,279 with no credit for Rs. 4,605.