9911796707
TMI Blog1987 (8) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... h is the assessment year 1980-81 for which the accounting year is the year ended 30-11-1979. It would appear that the assessee requested, as in the past, that rule 115 of the IT Rules be applied for converting the income from dividend expressed in US dollars. It was the case of the assessee that this rule dealt with both income accruing or arising or received in India as well as income deemed to accrue or arise or received in India. It was also argued that the tax is required to be imposed on real income and the real income is that over which the recipient has full dominion and control and which he can spend as he likes. The CIT (A) rejected this ground following the decision of the Special Bench of the Tribunal in the case of Allied Chemical Corpn. v. IAC [1983] 2 SOT 62 (Bom.). It is against this finding of the CIT (A) that the appellant has come in appeal in the first ground of appeal. 3. Shri Irani for the appellant pointed out that the view canvassed by the appellant was upheld in the appellant's own case for the assessment years 1968-69, 1971-72, 1973-74, 1974-75 and 1975-76. He, however, in all fairness, pointed out that the Tribunal had held a contrary view in the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given also did not hold good. He further held that the condition laid down in section 8(b) is fulfilled and the dividend of Rs. 68,04,000 declared on 14-9-1979 has rightly been included as the appellant's income in this year (assessment year 1980-81). 5. Before us, Shri Irani reiterated more or less the same arguments as were taken before the CIT (A). He argued that under section 8(b) of the Act, interim dividend shall be deemed to be income of the previous year in which the amount of such dividend is unconditionally made available to the member who is entitled to it. The aforesaid interim dividend of Rs. 68,04,000 was not remitted to the appellant in the previous year relevant to the assessment year under consideration and therefore it could not be said that the amount was unconditionally made available to the appellant in Panama in the previous year under consideration. Although Shri Irani agreed that the dividend was declared by the Board of Directors on 14-9-1979, dividend warrant was issued on 24-10-1979 and the Reserve Bank's permission obtained on 21-11-1979, the actual remittance of the dividend to the appellant company in Panama took place on 18-12-1979 which, according ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ividend was declared by the meeting of the Board on 14-9-1979 by the Indian company, namely, Pfizer Ltd. This company wrote a letter to the Reserve Bank of India on 20-9-1979 (page 11 of compilation filed by the assessee's counsel) seeking the approval of the Reserve Bank of India to remit this dividend to Pfizer Corporation, Colon, Panama, in respect of the shares held by them. Pfizer Corporation, Colon, Panama, held 75,60,000 fully paid shares of Rs. 10 each in Pfizer Ltd. (Indian company). The details of the interim dividend which Pfizer Ltd. intended to remit as gathered from this letter are as under : Rs. " Dividend at Re. 0.90 per share on 75,60,000 equity shares of Rs. 10 each 68,04,000 Less : Tax @ 25 per cent deductible 17,01,000 --------------------- Net dividend remittable 51,03,000 " -------------------- It would thus appear that the company declaring the dividend intended to remit only the net dividend remittable amounting to Rs. 51,03,000 for which it sought permission from the Reserve Bank through its letter dated 28-9-1979. The interim dividend was declared on 24-10-1979. The permit for remittance of this amount was issued by the Exchange Control ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no occasion for imposing tax on receipt outside India would arise in the case of a non-resident. Therefore, the argument that the interim dividend can be said to have become the income of the assessee only when the assessee received it cannot be accepted. 7. Shri Irani, no doubt, brought to our notice a decision of the Tribunal in the assessee's case in Pfizer Corpn.'s case and in particular para 5 of that decision at page 355. We find that this decision mainly dealt with the treatment of dividend declared. Relying on the decision of the Supreme Court in J. Dalmia's case, the Tribunal held that as far as the interim dividend is concerned, the year of assessment would be the year in which the dividend was remitted. Firstly, we find on perusal of the order of the Tribunal that the decision of the Special Bench in Allied Chemical Corpn.'s case was not cited before that Bench. There, the Special Bench of the Tribunal in terms held that under section 5(2) the total income of a non-resident assessee includes all such income that accrues or arises in India. The dividend income accrued or arose to the assessee on the date of declaration of interim dividend by the Indian company. The Spe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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