TMI Blog1971 (10) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of Rs. 5,790 and Rs. 39,085 could be deemed to be the dividend income of the Hindu undivided family in the respective assessment years ? " The assessee in this case is a Hindu undivided family. From the case stated it is not possible to state definitely as to how many coparceners were there in that family. But, we gather from the case stated that the three of the members of that family, viz., Doraiswamy, Singaram and Sarathy, were shareholders in a private limited company by name " The Chittoor Motor Transport Co. (Private) Ltd." Doraiswamy and Singaram held 100 shares each in that company ; Sarathy held 2,797 shares. The Tribunal found that these shares were acquired from out of the family funds. It appears that in the account years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such case had been taken up before the Tribunal, it was not possible to go into that contention. The facts found by the Tribunal did not afford any basis for that contention. In the result, the High Court answered the question referred to it in favour of the assessee. Before us Mr. B. Sen, the learned counsel for the revenue, took up two contentions. His first contention was that the loans advanced were those advanced to the shareholders of the company. Secondly, he contended that, at any rate, it must be held that those loans were advanced on behalf of or for the individual benefit of the shareholders. He submitted that the counsel for the revenue gave up the first contention before the High Court because of certain decisions of this co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is whether conditions Nos. 2(a) and 2(b) are satisfied. We shall first take up condition No. 2(b). No contention appears to have been taken before the Tribunal that the loans in question were given by the company on behalf of the shareholders or for their individual benefit. That being so, the Tribunal did not go into that question. In fact, as can be gathered from the case stated, the contention of the assessee before the Tribunal was that the loan, in question was borrowed for the benefit of another company. But the Tribunal did not go into that question. Under these circumstances, the High Court, in our opinion, was right in not going into that question because on the facts found by the Tribunal it was not possible to decide that content ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n given to a Hindu undivided family cannot be considered as a loan advanced to a " shareholder " of a company. Our conclusion in this regard receives support from the decisions of this court. In Howrah Trading Ltd. Co. v. Commissioner of Income-tax, this court had to examine the case of a person who had purchased shares of a company under a blank transfer. but in whose name the shares had not been registered in the books of the company. The question was whether he could be considered as a " shareholder " in respect of such shares for the purpose of section 18(5) of the Act, because of his equitable right to the dividend on such shares and, therefore, entitled to have that dividend grossed up under section 16(2) by addition of income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidered to have laid down the law correctly in view of the decision of this court in Kishanchand Lunidasingh Bajaj v. Commissioner of Income-tax. Therein the question was whether a Hindu undivided family could be charged to tax in respect of dividends received by some of the coparceners of that family in respect of shares held by them, those shares having been purchased from out of the family funds. This court ruled that the dividends paid to the shareholders was the income of the family and, that being so, the same was assessable in the hands of the Hindu undivided family. We see no conflict between this decision and the decisions earlier referred to. In the case of actual receipt of dividends there is a receipt of income. That income is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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