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TMI Blog1983 (12) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... am Chetty submitted a return for the assessment year 1970-71 under the I.T. Act, 1961. His assessment was finalised on January 13, 1971. The order was reopened later for, in the return, Rs. 3,600, being dividend received by him from M/s. Aruna Roller Flour Mills Private Limited, Mandapaka, was not shown by him. Therefore, the ITO, under s. 148 of the Act, reopened the assessment and included the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oint of " declaration of dividend ", the inclusion of the amount is proper. The question raised is no more res integra. It is covered by, at least, three cases of the Supreme Court. In the first case, in Dalmia v. CIT [1964] 53 ITR 83 (SC), the distinction between " interim dividend " and " dividend " was elucidated. That distinction is not relevant in the instant case as Rs. 3,600 dividend is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction between "paid " and " distributed " was elaborated. The difference between the two expressions, it was pointed out, the latter necessarily " involves the idea of division between several persons which is the same as payment to several persons ". It was held that when dividend is declared by a company, it is chargeable to tax as income of the year in which it is so declared. The fact that act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in the words " declaration ", " distribution " and " paid" was brought out: "........ the Legislature had not made dividend income taxable in the year in which it became due; by express words of the statute, it was taxable only in the year in which it was paid, credited or distributed or was deemed to be paid, credited or distributed " and some relevant cases were cited to hold that " in the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two aspects have to be juxtaposed, one he received the cheque in May, 1970, and the other he maintains cash system of accounts. The two aspects were not borne in mind by the income-tax authorities when they reopened the assessment. We are of the view, on the facts of this case, may be, the dividend was declared on March 28, 1970. Having regard to the cash system adopted by the assessee and the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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