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TMI Blog1987 (10) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... t failing due on July 5, 1976, and July 5, 1977, was includible and not the net dividend ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal is right in holding that the tax deducted at source from the dividends cannot be excluded in determining the market value of the deferred dividends declared ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal is right in holding that the interest due and payable by Nirlon Synthetic Fibres and Chemicals Ltd. on the deferred dividend on July 5, 1976, and July 5, 1977, under the provisions of the Companies (Temporary Restrictions on Dividends) Amendment Act, 1975, was an asset held by the assessee on the valuation date and, therefore, includible in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stalment of interest becomes due and payable on the expiry of the period of two years from the appointed day when the declared dividend also becomes distributable. The second instalment of interest becomes due and payable only at the end of one year from the date on which the period of two years expires. Because of the restrictions imposed by Act No. 35 of 1974, as amended by Act No. 28 of 1975, the company declared dividends for the years relevant to the assessment years in question, but withheld payment for period of two years from July 6, 1974. The company also paid interest in two instalments, first on the expiry of the period of two years and the second on the expiry of another year. The Wealth-tax Officer treated the gross dividen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ready method to achieve approximately the same result, finds no justification in the provisions of the Wealth-tax Act. Pursuant to the amendment of Act No. 35 of 1974 by Act No. 28 of 1975, it was perfectly within the right of the company to declare dividends. The company declared dividends, but deferred the payment as required by the provisions of Act No. 28 of 1975. The dividends had thus accrued. It was a right to receive payment of the dividend which had accrued in favour of the assessee for the relevant year, although the payment of the dividend was deferred to a future date. As stated by the Supreme Court in CWT v. Vysyaraju Badreenarayana Moorthy Raju [1985] 152 ITR 454, whatever be the system of accounting, an accrued right was a pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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