COMMISSIONER OF INCOME-TAX Vs. K M MADAN

JUDGEMENT

(1.) THIS is a reference under Section 66(1) of the Indian Income-tax Act, 1922. The relevant assessment year is the year 1941-42 for the accounting year, which in this case is from April 1, 1940, to March 31, 1941. The question referred to us is as follows: Whether in the circumstances of the case the amount of Rs. 178-9-3 received by the assessee from the Tata Iron and Steel Co. in the year of account, according to the decree of the High Court, was rightly held to be the dividend income of the years prior to the year of account, and not the income of the relevant accounting period?

(2.) THE sum of Rs. 178-9-3 is made up of a number of sums relevant to the different assessment years, but the principle is the same in all cases; and a sum of Rs. 26-1-1 in respect of the assessment year 1932-33 has been the sum around which the arguments and debate have revolved

(3.) THE company in paying its shareholders the preferential dividend in years subsequent to the scheme in fact deducted income-tax and gave a certificate, which is attached to the dividend warrant, and in which the following is the material extract: We hereby certify that income-tax on the entire (100%) profits and gains of the company, of which this dividend forms a part, has been or will be duly paid by us to the Government of India.