TMI Blog2015 (4) TMI 637X X X X Extracts X X X X X X X X Extracts X X X X ..... of the moneys received on account of share premium dividend was declared as was done in the case of Bharat Fire And General Insurance (1964 (4) TMI 44 - SUPREME COURT OF INDIA). Income Tax Appellate Tribunal was justified in law in deleting the addition made by the Assessing Officer under Section 2(22)(e) of the Income Tax Act, 1961. For the aforesaid reasons the question formulated at the time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any payment by a company, not being a company in which the public are substantially interested, of any sum (whether as representing a part of the assets of the company or otherwise) made after the 31st day of May, 1987, by way of advance or loan to a shareholder, being a person who is the beneficial owner of shares (not being shares entitled to a fixed rate of dividend whether with or without a ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofit was lying with the company. Their case is that the company was having a reserve created from out of the share premium. How is the money received by a company, on account of the share premium, is to be accounted for and how can that money be spent has elaborately been provided for in Section 78 of the Companies Act, 1956. Mr. Bhowmick, learned Advocate appearing for the appellant did not d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for declaring the dividend. The Companies Act of 1913 did not contain any prohibition as regards application of share premium money in declaring dividend. But the 1956 Act does not permit declaration of dividend from out of the money collected on account of share premium. Therefore, the judgment in the case of Bharat Fire And General Insurance (supra) has no manner of application to the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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