TMI Blog1977 (5) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 47,000 and not ₹ 1,05,000? 2. The assessee is a private limited company. Its accounts are closed at the end of each calendar year. The calendar year with which we are concerned is 1958 for which the assessment year is 1959-60. 3. For the calendar year 1957, the assessee made up its accounts and its audited balance-sheet was passed by the shareholders in the annual general meeting of the company held on December 4, 1958. In the report accompanying the accounts, the directors recommended the distribution of ₹ 1,05,000 as dividends. In the aforesaid annual general meeting the aforesaid recommendation as to declaration of dividends was approved by the shareholders. 4. The company had an account called dividend accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to its shareholders during the relevant previous year dividends in excess of 6% of the paid-up capital of the company. 7. The paid-up capital of the company before us was ₹ 3 lakhs. Any distribution in excess of ₹ 18,000 was thus liable to be followed by the withdrawal of rebate in the manner provided under Clause (c) of the second proviso. The Income Tax Officer took into consideration this proviso. He held that the company had declared ₹ 1,05,000 as dividends and this amount was to be taken into consideration for withdrawing the rebate. On the computation made by him, the Income Tax Officer withdrew ₹ 21,300 out of the rebate. 8. Appeal filed by the assessee was dismissed by the Appellate Assistant Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decisions should not be applied for determining the question before us, because these two cases were not decided on the provisions of law with which we are concerned. 14. Mr. Pal also argues that we should hold that the expression a company which......has distributed......dividends means a company which has declared dividends by following the dissenting judgment of Bachawat J. in the aforesaid Supreme Court case. 15. At pages 15 and 16 of the report, Bachawat J. says that the word distributed is not synonymous with the word paid or credited and under Section 12(1 A) of the Indian Income Tax Act, 1922, and Section 8 of the Income Tax Act, 1961, the declaration of dividend is crucial even for the purposes of assessment of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us : In addition, in the case of a company referred to in Clause (ii) of the preceding proviso which has distributed to its shareholders during the previous year dividends in excess of 6 per cent. of its paid-up capital, not being dividends payable at a fixed rate...... 19. The expression used is a a company which has distributed to its shareholders......dividends . The words has distributed cannot mean has declared . Further, the aforesaid expression is unambiguous and it connotes the idea that, after the declaration of dividends, the company has actually or constructively distributed the dividends to its shareholders. 20. Though ₹ 1,05,000 was declared as dividends, ₹ 47,000 was only distributed by the company. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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