1989 (5) TMI 154

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..... sst. yrs. 1980-81, 1981-82 and 1982-83. Shri M. Narayanan, Departmental Representative, appeared for the Department and Shri K. Srinivasan Shri Quadir Roseyen, Advocates, for the assessee. 2. The assessee claimed before the Assessing Officer that the business of the Naidhi was restricted to shareholders and that dividends were paid only to persons who had transactions during the year. the asse .....

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..... rs who did not have any transaction during the period year relevant to the assessment years. There was no complete identity between the contributors and the participants in the common fund. Shri K. Srinivasan, Advocate, on the other hand, argued that there was such complete identity between the contributors and the participants in the surplus an hence no part of the suplus was taxable. The princip .....

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..... m Mutual Benefit Fund (1964) 53 ITR 241 (SC). If all shareholders were to participate in the dividends irrespective of their having transactions with the Nidhi or not, then as explained by the Supreme Court, the position of the Nidhi would not have been different from that of an ordinary bank. A shareholder in the Kumbakonam Mutual Benefit Fund s case was entitled to receive his dividend as long a .....

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