COMMISSIONER OF INCOME TAX Vs. SIKSHA DEBI BHAGAT

JUDGEMENT

(1.) The following questions are involved in this reference under Section 66(1) of the Indian I.T. Act, 1922 :

(2.) The assessee is an HUF. Its karta was one Durgadutt Bhagat. After his death the name of his widow, Sm. Siksha Devi Bhagat, was substituted as the appellant before the AAC. Durgadutt was a partner in the firm of M/s. Banshidhar Durgadutt having a half share tharein. The firm of Banshidhar Durgadutt held a number of shares in two companies, viz., M/s. Bhagat Land Development Co. and M/s. Dhanlakshmi Trading Corporation Ltd.

(3.) Acting under Section 23A of the Indian I.T. Act, 1922, the ITO made an order declaring that the undistributed profits of the aforesaid two companies should be deemed to have been distributed as dividends to its shareholders in view of the unamended provisions which were then in force. Thereafter, the ITO acting under Section 34(1)(b) taxed the assessee in respect of the half share of Durgadutt relating to the deemed dividend deemed to have been received by the said firm.