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1966 (2) TMI 22 - SC - Income TaxWhether, on the facts and circumstances of the case, the dividend income from shares standing in the name of Kishanchand Lunidasingh Bajaj and acquired with the funds of the Hindu undivided family of which the said person was the karta was assessable in the hands of the assessee-family ? Held that:- In so far as it deals with dividend which is " grossed up ", sub-section (5) of section 18 forms a corollary to section 16(2). Therefore, when tax is paid on behalf of a shareholder and deduction is made from dividend, credit is given to him for the tax paid in his final assessment. But the scheme of " grossing up " is not susceptible of the interpretation that the income from dividend is to be regarded as the income only of the registered shareholder and not of the real owner of the share. Unable to accept the argument of counsel for the appellants that because the dividend income in respect of the shares cannot be " grossed up ", and credit for tax paid cannot be obtained by the appellants, the appellants are not liable to be taxed in respect of dividend received by them. There is no provision in the Act which supports this plea, and the scheme of the Act lends no countenance to an expedient which may lead to gross evasion of tax. Appeal dismissed.
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