TMI Blog1964 (9) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Viswanatha Sastri rightly concedes that the Pakistan portion of the dividend forms part of the assessee's total income, as defined in section 2(15) of the Act. The High Court was right in answering this question against the assessee " A ". For question three it is common ground that no certificate of assessment in the other Dominion has been produced before the Income-tax Officer. We agree with the High Court that the answer to this question is in the affirmative. For question four it will be noticed that the dividend due to the assessee has not been credited to any separate account of the assessee, so that he could, if he wished, draw it. Before the High Court it was never suggested that the dividend was credited or distributed. Accordingly we hold that the Pakistan portion of the dividend has not been credited or paid within the meaning of section 16(2) of the Income-tax Act. The answer to the question is, therefore, in the negative. Appeal dismissed. - - - - - Dated:- 22-9-1964 - Judge(s) : K. SUBBA RAO., J. C. SHAH., S. M. SIKRI JUDGMENT The judgment of the court was delivered by SIKRI J.---This judgment will dispose of 12 appeals from the judgments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1922 (hereinafter referred to as the Act), in respect of this Corporation. As a result of this order, Rs. 579 was deemed to have accrued to him. But in his reassessment order, dated January 17, 1955, the Income-tax Officer brought to charge not only the said Rs. 579 but also the said sum of Rs. 2,722, i.e., the Pakistan portion of the dividend received from Narandas Rajaram Ltd. The Appellate Assistant Commissioner upheld the assessment order both in respect of Rs. 579 and Rs. 2,722. The Appellate Tribunal also upheld the order. The Appellate Tribunal then referred the first three questions to the High Court but refused to refer the following question : " Whether, on the facts and circumstances of the case, the relief allowed in the assessment under section 23(3) on that portion of dividend income from Narandas Rajaram Co. Private Ltd., which is attributable to the income of the company arising in Pakistan can be withdrawn while making reassessment under section 34(1)(b) ? " Assessee " A " took out a notice of motion for a reference of the said question. The High Court, by its judgment dated March 17, 1958, answered the three questions against the assessee. The High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1952, and the balance was payable " within 2 months after remittances from Pakistan become free ". The Income-tax Officer included the entire amount of Rs. 1,71,992 in the total income of assessee " A ". Both the Appellate Assistant Commissioner and the Appellate Tribunal confirmed this. On an application of assessee " A ", the Tribunal referred three questions : the first question is Question " D " , the second question is similar to the question No. 2 and the third similar to question No. 3, reproduced in the beginning of the judgment. The High Court answered question " D " in the negative (i.e., against the Commissioner of Income-tax) and the others, as in the other reference against the assessee. The High Court granted certificates under section 66A(2) of the Act both to the assessee " A " and the Commissioner of Income-tax. It is not necessary to give the facts in the cases of other assessees for, apart from the amount of dividend involved, the facts are similar. It is not necessary to discuss the first question, which raises the point of the validity of proceedings under section 34 of the Act, because it is common ground that it has become academic. This common ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the lower amount of tax payable on such excess in their Dominion as provided for in article VI. Article VI.---(a) For the purposes of the abatement to be allowed under article IV or V, the tax payable in each Dominion on the excess or the doubly taxed income, as the case may be, shall be such proportion of the tax payable in each Dominion as the excess or the doubly taxed income bears to the total income of the assessee in each Dominion. (b) Where at the time of assessment in one Dominion, the tax payable on the total income in the other Dominion is not known, the first Dominion shall make a demand without allowing the abatement, but shall hold in abeyance for a period of one year (or such longer period as may be allowed by the Income-tax Officer in his discretion) the collection of a portion of the demand equal to the estimated abatement. If the assessee produces a certificate of assessment in the other Dominion within the period of one year or any longer period allowed by the Income-tax Officer, the uncollected portion of the demand will be adjusted against the abatement allowable under this Agreement ; if no such certificate is produced, the abatement shall cease to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is liable to taxation under its laws. The Schedule has been inserted only for the purpose of calculating the abatement to be allowed. Article VI also leads to the same conclusion. For if no assessment could be made on the amount on which abatement is to be allowed, there could be no question of making a demand without allowing the abatement and holding in abeyance for a period the collection of a portion of the demand equal to the estimated abatement. It is common ground that no certificate of assessment in the other Dominion has been produced before the Income-tax Officer. We agree with the High Court that the answer to this question is in the affirmative. The other question that remains is question " D ", set out above. The High Court approached the question in the light of the decision of the Bombay High Court in Commissioner of Income-tax v. Laxmidas Mulraj Khatau. It came to the conclusion that the resolution created only a contingent liability, and, therefore, the dividend could not be said to have been paid in the previous year of the assessment year 1953-54. Mr. Gupte, the learned Additional Solicitor-General, has urged that this view is wrong but that in view of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
