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TMI Blog1973 (9) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of Income-tax, U. P., Kanpur. The statement of the case relates to the assessment years 1963-64, 1964-65 and 1965-66 with the relevant previous years ending on March 31 of 1963, 1964 and 1965, respectively. The assessee is a member of the Hindu undivided family of which Seth Sheo Prasad was the karta. The family owned certain shares of Lord Krishna Sugar Mills Ltd. (hereinafter referred to as " the company "). The shares were registered in the name of the karta. By a deed dated July 28, 1962, a partial partition was carried out in the family and shares of the company were divided amongst the various members. By letter dated August 6, 1962, the assessee applied to the company for the transfer in his name of the shares allotted to him. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit of tax deducted at source. The Commissioner is aggrieved and at his instance the Income-tax Appellate Tribunal has referred the following question for the opinion of this court : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee was entitled to get benefit of tax deducted at source from dividends of Lord Krishna Sugar Mills Ltd.? " Now the assessee during the relevant years was not a shareholder of the company for purposes of the Companies Act inasmuch as the shares had not been transferred in his name. He was a beneficial owner, the shares having been allotted to him on partition. Under the Indian Income-tax Act, 1922, the tax deducted at source from dividend could only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sable as the income of a person other than the shareholder, the payment shall be deemed to have been made on behalf of, and the credit shall be given to, such other person in such circumstances as may be prescribed :........ " Rule 30A has been added to the rules framed under the Income-tax Act. This rule so far as material for our purposes runs : " 30A. Credit for tax deducted at source to a person other than the shareholder in certain circumstances.--(1) Subject to the provisions of sub-rule (2), where the dividend on any share is assessable as the income of a person other than the shareholder, any deduction made in accordance with section 194 and paid to the Central Government, shall be deemed to be a payment of tax on behalf of, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, has been delivered to the company along with the certificate relating to the shares or depentures, or if no such certificate is in existence, along with the letter of allotment of the shares........ " Mr. R. R. Misra, the learned counsel for the Commissioner of Income-tax, argues that the assessee had not complied with section 108 of the Companies Act and hence he was not entitled to the credit for the tax deducted at source. His contention is that the shares should have been transferred in the name of the assessee in the relevant previous year or at any rate action should have been taken for the transfer of the shares to his name in accordance with section 108 of the Companies Act within the relevant previous year and this not having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ares registered in the name of Seth Shiv Prasad for recovery of income-tax dues, no transfer could be effected by the company. The shares were ultimately transferred only after they were released from attachment by the income-tax department and even then after obtaining an indemnity bond from the assessee. It is clear that the delay in transfer was not for want of necessary steps but because of the attachment of the shares by the income-tax department. The next contention that a duly stamped and executed instrument of transfer signed by the transferor and by or on behalf of the transferee, as required by section 108 of the Companies Act, had not been filed, also cannot be accepted in view of the finding of the Tribunal that no such objectio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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