1967 (7) TMI 46

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..... should be excluded on the ground that the assessee was not the registered shareholder ? " The question of law arises in the circumstances hereinafter stated. There was a firm known as Messrs. Sen and Pandit. The assessee, Sudhir Kumar Sen, was, at one time, a partner of the said firm. The firm above named was a shareholder of a limited company known as Messrs. S. K. Sen and Sons Limited. On or about September 26, 1951, the firm known as Messrs. Sen and Pandit was dissolved and its assets and liabilities were taken over by a private limited company named Messrs. Sen and Pandit Private Limited. The transfer of assets to the last named private company included the shares held by Messrs. Sen and Pandit firm in the company known as Messrs. S. .....

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..... ed that the word " shareholder " in section 23A of the Indian Income-tax Act, 1922, means the shareholder registered in the books of the company and the amount of the dividend deemed to have been distributed to the shareholder of a company, against which an order under section 23A has been made, could be assessed only in the hands of the registered shareholder and nobody else. In the present case, admittedly, the firm styled Messrs. Sen & Pandit was the registered shareholder of the company, Messrs. S. K. Sen & Sons Ltd. The assessee was not a shareholder of the company. It is no doubt true that a firm is not a legal entity for all purposes and it is doubtful whether a firm could legally be registered as a shareholder of a limited company, .....

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..... at, although registered shareholders were ordinarily to be considered as persons who received the deemed dividend, still than if a registered shareholder became non-existent, it was open to the Income-tax Officer to lift the veil and to find out who were the persons who were interested in the shares, at one time held by the registered shareholder, and to include the deemed dividend in their income. In support of the last proposition he relied upon a decision of the Supreme Court in Kishanchand Lunidasing Bajaj v. Commissioner of Income-tax. In our opinion, there is nothing contained in the last mentioned judgment of the Supreme Court which detracts anything from the observation made by the Supreme Court in Shakuntal's case. This is what was .....

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