9911796707
TMI Blog1969 (7) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer rejected the contention and brought the dividend to tax in the hands of the respondents. The Appellate Assistant Commissioner held that Rs. 1,12,500 out of a total amount of Rs. 2,24,000 distributed by the company, represented capital gains arising to the company on or after April 1, 1948, and not being dividend within the meaning of section 2(6A) of the Income-tax Act, 1922, the share distributed to the shareholders out of that amount was exempt from income-tax. The order of the Appellate Assistant Commissioner was reversed in appeal by the Tribunal. In the view of the Tribunal the definition of " dividend " in section 2(6A) in force in the year of assessment was not exhaustive, and if the amount distributed was " dividend in ordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arising before the, 1st day of April, 1946, or after the 31st day of March, 1948. " Dividend distributed by a company being a share of its profits declared as distributable among the shareholders is not impressed with the character of the profits from which it reaches the hands of the shareholders. It would be therefore difficult to hold that the mere fact that a distribution has been made out of the capital gains, it has the attributes of capital gains in the hands of the shareholders (sic). But that does not assist the case of the revenue, for the legislature has expressly excluded from the content of dividend, capital gains arising after March 31, 1948. The proviso to the Explanation clearly enacted that capital gains arising after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court that the proportionate share of the capital gains out of which the dividend was distributed to the shareholders of the company must be deemed exempt from liability to pay tax under section 12 as dividend income liable to tax. Counsel for the revenue sought to argue that the share of dividend which is not chargeable to tax by virtue of the exemption clause is still liable to tax as income other than dividend. But no such contention was raised before the Tribunal or the High Court and no question was raised in that behalf. We will not be justified in entering upon the question which was not raised or argued before the Tribunal and before the High Court. The appeals fail and are dismissed with costs. One hearing fee. Appeals dism ..... X X X X Extracts X X X X X X X X Extracts X X X X
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