9911796707
TMI Blog1972 (11) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the following question referred to it under section 66(1) of the Indian Income-tax Act, 1922, in the negative in favour of the revenue : " Whether, on the facts and in the circumstances of the case, the Tribunal was justified in excluding from the assessable income of 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) L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessed accordingly. " Name of shareholder Gross dividend Rs. 1. Smt. I. D. Oberoi, wife of the assesses: (a) 15,886 shares of Associated Hotels (I) Ltd. 3,971 (b) 30 shares of Northern India Caterers Ltd. 15,273 2. Mr. T. R. Oberoi, son of the assessee: (a) 50 shares of Northern India Caterers Ltd. 25,454 (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: " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00 ordinary shares issued and paid up as on 31-2-47. " Reliance was also placed upon the following extract from a letter addressed by the assessee to the Commission : " In preparing the statement of wealth, I have taken into account all the assets of which I and other members of my family are possessed. According to the statement of wealth furnished the evaded income comes to Rs. 20 lakhs. All the money that was evaded is invested mainly in the shares of Associated Hotels of India Ltd. There has been 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 Investig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e burden which lay upon him to show that the shares had not been purchased by him benami in the name of his wife and sons but he had failed to discharge that burden The High Court also held that the real owner could be assessed on the dividend income even though his wife and sons were the registered holders of the shares. In the result, the question referred, as already mentioned earlier, was answered in the negative. In appeal before us, Mr. Desai on behalf of the assessee-appellant has contended that the 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 tho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee. It was not even mentioned that the above admission was erroneous. On the contrary, the Tribunal took the view that as the wife and two sons of the assessee were the registered holders of the shares in question, dividend income from those shares should have been assessed as their income and not that of the assessee. The Tribunal in this context relied upon the decision of this court in Howrah Trading Co. v. Commissioner of Income-tax. What was held in that case was that a person who purchases shares 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at though the shares might have been acquired out of the secreted profits of the appellant, in the absence of any evidence that the shares remained in substance the property of the assessee, the dividend income could not be included in his total income. The approach of the Tribunal in this respect too was erroneous. Once it was found that the assessee was the real owner of the shares and they had been purchased benami in the names of his wife and two sons, it would be presumed that the ownership of the shares continued 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
