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1965 (11) TMI 42 - SC - Income TaxWhether section 35(10) authorises the Income-tax Officer to bring to tax rebate granted in assessment years commencing prior to April 1, 1956? Whether distribution by the liquidator of accumulated profits in the previous years could be regarded as declaration of dividend within the meaning of section 35(10) so as to attract the applicability of the provisions enabling withdrawal of rebate and demand for tax? Held that:- It is true that the definition of " dividend " in section 2(6A)(c) will apply only if there is nothing repugnant in the subject or context in which the expression " dividend " occurs in section 35(10), but there is nothing in section 35(10) which suggests that the expression " dividend " was to have a meaning different from the meaning assigned to it by the interpretation clause. The liquidator of the appellant-company did from time to time distribute accumulated profits, and within the meaning of section 2(6A)(c) read with the provisions of the Companies Act, they were distribution of interim dividends. It is true that power under section 35(10) may be exercised if accumulated profits are availed of by the company " for declaring dividends in any year ", but since the Companies Act does not in the matter of distribution of interim dividends set up any special machinery, nor impose any special condition before power in that behalf may be exercised, no artificial meaning can be attached to the word " declaring dividends ". Distribution of accumulated profits by the liquidator together with the income-tax refund certificate in the course of voluntary winding up may, therefore, for the purpose of section 2(6A)(c), be regarded as declaration of dividend. Appeal dismissed.
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