REGENT COMPUTRONICS PVT. LTD.

C.W. SPENCER Appellant

V/S

INCOME-TAX OFFICER, CITY CIRCLE II, MADRAS Respondents

Referred Judgements :-

BRAINARD V. HUBBARD [REFERRED TO]
EISNER V. MACOMBER [REFERRED TO]
ANDERTON AND HALSTREAD LTD. V BIRRELL [REFERRED TO]
DODWORTH V. DALE [REFERRED TO]
COMMISSIONERS OF INLAND REVENUE V. BLOTT [REFERRED TO]
JOHN SMITH AND SON V. MOORE [REFERRED TO]
G.R. RANKINE V. COMMISSIONER OF INLAND REVENUE [REFERRED TO]
HALVERING V. NORTHWEST STEEL ROLLING MILLS [REFERRED TO]
RAJENDRANATH MUKHERJEE V. COMMISSIONER OF INCOMETAX,BENGAL [REFERRED TO]
PENANG AND GENERAL INVESTMENT TRUST LTD. V. INLAND REVENUE COMMISSIONERS [REFERRED TO]
HELVERING V. NATIONAL GROCERY CO. [REFERRED TO]
IN RE: CENTRAL PROVINCES AND BERAR SALES OF MOTOR SPIRIT AND LUBRICANTS TAXATION ACT,1938 [REFERRED TO]
LATILLA V. INLAND REVENUE COMMISSIONER [REFERRED TO]
IN RE: PATIALA STATE BANK [REFERRED TO]
NAVINCHANDRA MAFATLAL V. COMMISSIONER OF INCOMETAX,BOMBAY CITY [REFERRED TO]
UNITED PROVINCES V. ATIQA BEGUM [REFERRED TO]
SC CAMBATTA V. COMMISSIONER OF INCOME-TAX,BOMBAY [REFERRED TO]
COMMR OF INCOME TAX EXCESS PROFITS TAX BOMBAY CITY VS. BHOGILAL LAHER CHAND INCLUDING BATLIBOI AND CO BOMBAY [REFERRED TO]
HIMMATLAL HARILAL MEHTA VS. STATE OF MADHYA PRADESH [REFERRED TO]
LAXMANAPPA HANUMANTAPPA JAMKHANDI VS. UNION OF INDIA [REFERRED TO]
INDIA UNITED MILLS LIMITED VS. COMMR OF EXCESS PROFITS TAX BOMBAY [REFERRED TO]
CHATTURAM HORILRAM LIMITED VS. COMMR OF INCOME TAX B AND O [REFERRED TO]
VISWANATHAN CHETTIAR V. COMMISSIONER OF INCOMETAX,MADRAS [REFERRED TO]
B M AMINA UMMA VS. INCOME TAX OFFICER KOZHIKODE [REFERRED TO]
DUGGAN COL SIR J N VS. COMMISSIONER OF INCOME TAX [REFERRED TO]
NAVINCHANDRA MAFATLAL VS. COMMISSIONER OF INCOME TAX BOMBAY [REFERRED TO]
IN RE: LACHHIRAM BASANTLAL VS. STATE [REFERRED TO]
E R CROFT VS. SYLVESTER DUNPHY [REFERRED TO]

JUDGEMENT

(1.) EACH of the petitioners held ten shares in Gannon, Dunkerley & Co, Ltd., Bombay. EACH of them obtained a further 80 shares when bonus shares were issued by the company in 1948. They disclosed in their returns for the assessment year 1950-51 the dividend income on those 90 shares. The books of the company showed that each of them had in addition 1260 shares registered in his name. The claim of the petitioners was that these snares were in their names as the nominees of one of the controlling shareholders of that company. viz, M. R. Morarka.

(2.) PROCEEDINGS were taken against Gannon Dunkerley & Co., hereinafter referred to as the "company" under Section 23-A of the Income-tax Act. which resulted in an order dated 11-3-1955. On an apportionment of those undisbursed profits each of the petitioners was liable to treat as part of his income, assessable in the year of assessment 1950-51 a sum of Rs. 16,411 (the dividend on 1350 shares) and pay incometax on that basis under Section 23-A. Notices were issued to the petitioners under Section 34 of the Act on 23-3-1955, and they were asked to show cause against revised assessment for the assessment year 1950-51.

(3.) THE trouble, loss to the country's exchequer, was the same whether the company was controlled by one man or by a numerically larger group of persons, as distinct from the companies in which the public were substantially interested. In this class of controlled companies the company was a juristic person distinct from the shareholders who were each a separate juristic entity. THE liability to tax on income was not the only legal obligation, to define and impose which legislatures and courts have been called upon in various countries to look at the human individuals covered by the mask of a juristic person like the company.

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C W SPENCER Vs. INCOME TAX OFFICER

Referred Judgements :-

JUDGEMENT

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