COMMISSIONER OF INCOME TAX Vs. AMBALAL KILACHAND

JUDGEMENT

(1.) A common question of law arises in both these references. For the sake of convenience, we are referring to the facts in Income -tax Reference No. 433 of 1982. The assessee is an 'individual' and was at all material times a resident of India. The assessee received dividend income from companies in the United Kingdom. The companies in the United Kingdom had paid the corresponding tax to the United Kingdom treasury on the dividends so received. For the assessment years 1970 -71 to 1974 -75 (which are the concerned assessment years), the assessee received the following amounts which are, for the sake of convenience, referred to as 'net dividend', while the amount received plus the corporation tax paid on it by the concerned U. K. company in the United Kingdom is referred to, for the sake of convenience, as 'gross dividend'. The amounts involved in the five assessment years in question are as follows :

(2.) IT is the assessee's contention that only the dividend actually received by him (the net dividend) is includible in his total income, as this is the income which accrued to him and was received by him outside India. It is, however, the contention of the Department that the tax which has been deducted in the United Kingdom is a part of the income of the assessee. Therefore, the income which is includible in the total income is the gross dividend.

(3.) A similar question has also been raised in Income -tax Reference No. 130 of 1986. The assessment years involved in the Income -tax Reference No. 130 of 1986 are the assessment years 1970 -71 to 1973 -74.