1987 (3) TMI 17

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..... B. P. JEEVAN REDDY J.-The question referred in this case for our opinion, under section 256(1) of the Income-tax Act, is : " Whether, on the facts and in the circumstances of the case, the assessee should be given credit for the tax deducted at source on dividends derived from the shares held in the name of C.B. Taraporewala ? " The assessee is " Trustees of H.E.H. The Nizam's Dependants and Kh .....

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..... sel conceded that the point raised in the appeal is concluded against him by the decision of this court in CIT v. Smt. Batool Begum [1976] 104 ITR 642. The Appellate Assistant Commissioner, while agreeing with the Income-tax Officer, directed, however, that the assessee should be taxed only on the net dividend income. So the " appellant should only be assessed on the net dividend income..." On fur .....

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..... the shares held by the trust, the tax deducted at source on such share income should be given credit to. This was rejected by the High Court and, in our opinion, rightly, on the ground that the assessee was not the holder of the shares. Now, coming to the facts of the case before us, the assessees are the trustees of H.E.H. the Nizam's Dependants and Khanazadas Trust. certain dividend income is b .....

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..... sment of this assessee. In other words, either the dividend income is that of the trustees or it is not. If the dividend income is the income of the trustees, then they are also entitled to the benefit of being given credit to the tax deducted at source. The grounds upon which the authorities have refused to give credit to the tax deducted at source, logically extended, would also mean that the di .....

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..... e do not think that the direction given by the Appellate Assistant Commissioner to tax only the net dividend income is correct. The gross income from the dividends shall be treated as the income of the assessee and the tax deducted at source on those shares shall be given credit to, in accordance with law. The question referred to us is answered in the above terms. No costs.
Case laws, Decisi .....

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