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TMI Blog1971 (8) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... the court was delivered by HEGDE J.-- Two questions of law which arise for decision in these appeals are : " (1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the distribution to the assessee of the amount attributable to land acquisition compensation received by the Ukhara Estate Zamindaries Ltd. after 31st March, 1948, was, in the hands of the assessee, receipt of dividend within the meaning of section 2(6A) of the Indian Income-tax Act, 1922 ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the receipt by the assessee of the amount attributable to salamis realised by the Ukhara Estate Zamindaries Ltd. for grant of long-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereafter distributed as dividends of the company. The remainder of the dividends was paid out of the balance of the profit and loss account. In these appeals the dispute centres round the taxability of that share of the dividend which has been paid out of the capital gains in the hands of the company. The Income-tax Officer came to the conclusion that no dividend distributed can be considered as having been paid out of the" capital gains "of the company; therefore, the same is taxable as" dividend In appeal the Appellate Assistant Commissioner accepted the contention of the assessee that the receipt of Rs. 8,829 cannot be considered as dividend within the meaning of section 2(6A) of the Act but he held that the same is taxable as income in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ukhara Estate Zamindaries Ltd. His case was no different from that of the respondents herein. But the only point that arose for decision in that appeal was whether the receipts similar to those we are considering here can be considered as "dividend"? This court answered that question in the negative. This court refused to go into the question whether the same could be considered as income other than dividend. Dealing with that contention this court observed : Counsel for the revenue sought to argue that the share of dividend which is not chargeable to tax by virtue of the exemption clause is still liable to tax as income other than dividend. But no such contention was raised before the Tribunal or the High Court and no question was raise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set out the law. Let us now turn to the facts of this case. The assessees were shareholders in the company. They were beneficially entitled to the capital of the company. The amount with which we are I concerned in these appeals was received by the company as salamis and as compensation for the acquisition of the lands of the company. It was not something earned by the company in the course of its business. Undoubtedly, it was a capital receipt in the hands of the company but that by itself is not sufficient. We have next to see whether it was a capital receipt in the hands of the assessee. As mentioned earlier, the assessee had a beneficial interest in that sum when it was in the hands of the company. Therefore, when that sum was di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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