R R KHANDELWAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference under s. 66(1) of the Indian IT Act at the instance of the assessee. We are here concerned with the asst. yr. 1953-54, the relevant accounting period being October 31, 1951, to October 18, 1952. The assessee has been taxed in the status as an individual. The assessee derives income from dividends on shares. The assessee has been taxed from the year 1948-49. Throughout from 1948-49 to 1953-54, the income from dividend received by the assessee has been assessed in his hands on the basis of receipt, i.e., on the dividend actually received by him irrespective of the dates on which the dividends were declared. In his return for the year 1953-54 which was filed on 2nd October, 1953, the assessee declared a total income of Rs. 58,746. In the assessment made on February 16, 1954, however, his total income was computed at Rs. 1,28,773.

(2.) IN the return filed by the assessee in the next year 1954-55 (accounting period being October 19, 1952, to November 6, 1953), the assessee had included an income of Rs. 60,090.52 nP. as receipts from the dividend, giving details thereof as per annexure "A" attached to the statement of the case. On the scrutiny of this return, the ITO took the view that the said dividend income of Rs. 60,090.52 nP. could not be assessed in the year 1954-55, because the said dividends were not declared in the relevant accounting period of the asst. yr. 1954-55 but were declared in the accounting period relevant to the asst. yr. 1953-54. On the basis of this information, the ITO gave a notice under s. 34(1)(b), calling upon the assessee to show cause why the assessment should not be re-opened inasmuch as the aforesaid income of Rs. 60,090.52 nP. had escaped assessment in 1953-54.

(3.) IT is not necessary to deal with the third question inasmuch as no arguments were advanced on this question in view of the decision of this Court in CIT vs. A. D. Shroff (1957) 31 ITR 284 (Bom).