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TMI Blog1972 (11) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee for the assessment years 1953-54 and 1954-55 the sums of Rs. 56,586 and Rs. 39,542 which were the amounts of dividend received by the assessee's wife and two sons from shares acquired out of the profits of the assessee ? " The matter relates to assessment years 1953-54 and 1954-55, the corresponding previous years for which ended on March 31, 1953, and March 31, 1954, respectively. The appellant-assessee is the managing director of Messrs. Hotels (1938) Ltd. and other associated companies con trolling a number of hotels in India. For the assessment years 1953-54 and 1954-55, the appellant showed incomes of Rs. 66,694 and Rs. 87,570 as the gross dividend derived by him from the following shares held by him : (i) Associated H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 54 (b) 6,823 shares of Associated Hotels (I) Ltd. 1,706 3. Mr. P. R. S. Oberoi, son of the assessee (a) Northern India Caterers Ltd. (20 shares) 10,182 56,586" Similarly, for assessment year 1954-55 the Income-tax Officer included the following dividends in the total income of the assessee: " Name of the shareholders Net dividend Rs. Smt. I. D. Oberoi ... 15,886 shares of Associated Hotels of India Ltd. 3,177 30 shares of Northern India Caterers Ltd. 10,500 Sri T. R. Oberoi ... 50 shares of Nothern India Caterers Ltd. 17,500 6,823 shares of Associated Hotels of India Ltd. 1,365 Sri P. R. S. Oberoi ... 20 shares of Northern India Caterers Ltd. 7,000 39,542 " When the assessee went up in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een great fall in the price of these shares. In fixing up my liability and the payment thereof due account will have to be taken of the fall in prices of these shares and my capacity to pay. " It was also found that the Income-tax Investigation Commission had held that the shares had been acquired by the assessee out of the suppressed income which was determined to be Rs. 16,62,211. In second appeal before the Income-tax Appellate Tribunal, the assessee contended that the Income-tax Investigation Commission had considered only the shares of the Associated Hotels of India Ltd., but the bulk of dividend included in the assessee's income in the two assessment years in question was the dividend declared by Northern India Caterers Ltd. Conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he High Court was in error in interfering with the finding of the Tribunal that the wife and the two sons of the assessee, who were the registered holders of the shares in queestion, could only be assessed for the dividend income from those shares. In this respect we find that the question referred to the court assumes that the shares on account of which the wife and the two sons of the assessee received the dividend amounts of Rs. 56,586 and Rs. 39,542 had been acquired out of the profits of the assessee. In addition to that, we find that the order of the Income-tax Officer for the assessment year 1953-54 shows that it had been admitted by the assessee in the past before the department that the shares in question standing in the names of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res in a company under blank transfer and in whose name the shares have not been registered in the books of the company is not a " shareholder " in respect of such shares within the meaning of section 18(5) of the Indian Income-tax Act, 1922, notwithstanding his equitable right to the dividend on such shares. It was further held that such a person was not entitled to have his dividend income grossed up under section 16(2) of the Act by the addition of the income-tax paid by the company in respect of those shares. The decision in Howrah Trading Co. was considered by a larger Bench of this court in Kishanchand Lunidasingh Bajaj v. Commissioner of Income-tax. It was held in that case that a company for its purpose does not recognize any trus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontinued to remain vested in the assessee, unless it was shown that because of some subsequent event, he had ceased to be the ower of the shares. No such attempt was made by the assessee. In view of the admissions referred to in the order of the Income-tax Officer, nothing hinges, in our opinion, upon the fact that the shares referred to in the letter of the assessee to the Income-tax Investigation Commission were mainly of the Associated Hotels of India and not of Northern India Caterers Ltd. We may also observe that if the Income-tax Appellate Tribunal records a finding on the point as to whether a purchase was made benami or not, such a finding as observed in Sree Meenakshi Mills Ltd. v. Commissioner of Income-tax would be considered ..... X X X X Extracts X X X X X X X X Extracts X X X X
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