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TMI Blog1971 (8) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... pt of dividend within the meaning of section 2(6A) of the Indian Income-tax Act, 1922 ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the receipt by the assessee of the amount attributable to salamis realised by the Ukhara Estate Zamindaries Ltd. for grant of long-term leases after 31st March, 1948, was a receipt of income of the assessee and taxable as the income of the assessee from other sources ? " On both these questions the decision of the authorities under the Indian Income-tax Act, 1922 (in brief "the Act"), as well as that of the Tribunal was against the assessees. But, disagreeing with the view take by these authorities, the High Court answered both these questions in fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " capital gains "of the company; therefore, the same is taxable as" dividend In appeal the Appellate Assistant Commissioner accepted the contention of the assessee that the receipt of Rs. 8,829 cannot be considered as dividend within the meaning of section 2(6A) of the Act but he held that the same is taxable as income in the hands of the assessee. The Tribunal confirmed the order of the Appellate Assistant Commissioner. It is now well-settled that, in order to find out whether a receipt is a capital or revenue receipt,' one has to see what it is in the hands of the receiver and not its nature in the hands of the payer. In other words, the nature of receipt is determined entirely by its character in the hands of the receiver and the sourc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t contention this court observed : 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. " In these appeals we have to decide what was left undecided in that case. Coming back to the question how exactly to draw the line between a capital receipt and a revenue receipt in cases of the type that are before us, one can do no better than refer to the observations of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a capital receipt in the hands of the company but that by itself is not sufficient. We have next to see whether it was a capital receipt in the hands of the assessee. As mentioned earlier, the assessee had a beneficial interest in that sum when it was in the hands of the company. Therefore, when that sum was distributed amongst the shareholders of the company, each of the shareholders took a share of the capital asset in which they were beneficially entitled. That being so the receipt with which we are concerned in these appeals must also be considered as capital receipt. The fact that those sums were distributed as "dividends" does not change the true nature of the receipt. A receipt is what it is and not what it is called. In the resu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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