9911796707
TMI Blog1981 (11) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... 7-78. 2. The ITO noticed that the assessee was holding 3,124 ordinary shares of Calico Mills. The said company declared dividend of Rs. 59,375 in its annual general body meeting held on 10-9-1976. The date of dividend warrant issued by the said company in respect of the said dividend was 27-9-1976. Thus, both the dates of declaration of dividend as also the date of dividend warrant fall within the previous year ended 30-9-1976 which is relevant to the assessment. The ITO called upon the assessee to state as to why the said dividend income should not be included in the income for the assessment year under appeal. The assessee's contention was that he had received the dividend warrant on 1-10-1976 and, therefore, the income from this divide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidend income was assessable in the subsequent assessment year. These arguments were rejected by the Commissioner (Appeals) who pointed out that the income from dividend was includible in the total income of the assessee on the date of declaration by a fiction of law enacted in section 8. He next pointed out that the dividend was declared at the annual general body meeting held on 10-9-1976, the date which fall within the previous year relevant to the assessment year under appeal, namely, 30-9-1976. He finally observed that the reliance placed on sections 205A and 207 of the Companies Act was misplaced, inasmuch as the above provisions do not lay down any principles to the effect that the enforceable right of a shareholder to dividend accru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ared by a company or distributed or paid by it within the meaning of sub-clause (a) or sub-clause (b) or sub-clause (c) or sub-clause (d) or sub-clause (e) of clause (22) of section 2 shall be deemed to be the income of the previous year in which it is so declared, distributed or paid, as the case may be. Thus, this section postulates three contingencies relating to inclusion of dividend in the total income of an assessee-firstly, declaration by the company, secondly, distribution by the company and thirdly, payment by the company. The last two contingencies would arise or fall for consideration in regard to the deemed dividend under the provisions of section 2(22)(a) to (e) of the Act. In other words, the expression "dividend" as laid down ..... X X X X Extracts X X X X X X X X Extracts X X X X
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