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1 - 10 of 11 (0.26 seconds)Commissioner Of Income Tax, Bihar & ... vs Maharajadhiraja Sir Kameshwar Singh Of ... on 17 October, 1939
In Commissioner of Income-tax v. Kameshwar Singh the assessees father who carried on a money lending business made a loan under an indenture described as "a zarpeshgi lease with usufructuary mortgage". A certain portion of the rent was reserved to the mortgagor as thika rent and the mortgagee was allowed to take the balance of the profits after deducting the expenses as thika profits in consideration of the loan. It was held by the Judicial Committee that thika profits received by the assessee as mortgagee lessee were exempt from income-tax, being agricultural income. Mr. Mazumdar relied strongly on the following passage from the judgment of Lord Macmillan in this case :- "The result, in their Lordships opinion, is to exclude agricultural income altogether from the scope of the Act, however or by whomsoever it may be received.
Section 4 in Income Tax Rules, 1962 [Entire Act]
Bacha F. Guzdar vs The Commissioner Of Income-Tax, Bombay ... on 28 March, 1952
To the same effect is the decision of the Bombay High Court in Mrs. Bacha E. Guzdar v. Commissioner of Income-tax, Bombay City. The question which arose in that case for determination is identical with the question referred in the present case. The question was whether the assessee could validly claim 60 per cent. of the dividend income received on shares of tea companies as exempt from tax being agricultural income. It was held by the High Court that the immediate source of the assessees income was not land but was the declaration of the dividend and so the assessee was not entitled to claim exemption from being taxed on the dividends of the tea companies.
The Commissioner Of Income-Tax vs The Hungerford Investment Trust ... on 26 May, 1936
Mr. Mazumdar challenged the correctness of the Bombay decision and in support of his argument referred to three authorities : Commissioner of Income-tax v. Sir Kameshwar Singh, Governor-General in Council v. Raleigh Investment Co. Ltd. and Commissioner of Income-tax v. Hungerford Investment Trust Ltd. In my opinion the principle laid down in these cases has no bearing on the question which is being investigated in the present case.
Commissioner Of Income Tax, Bengal vs Hungerford Investment Trust, Ltd. on 11 January, 1935
Counsel for the assessee next referred to Commissioner of Income-tax, Bengal v. Hungerford Investment Trust Ltd. in which the question at issue was the proper interpretation to be placed upon Section 14 (2) (a) of the Indian Income-tax Act. Mr. Mazumdar strongly relied upon the following passage from the judgment of Sir George Rankin : "Clause (a) of sub-section (2) is a more or less similar provision in the case of a company paying dividends. Its object is to ensure that tax shall not be paid more than once upon what the statute regards as the same thing. The company though a separate legal persona in the contemplation of law and liable to assessment as a subject chargeable with tax is not for all purposes to be regarded as entirely separate and distinct from the corporators. The underlying principle of the clause as the Commissioner in stating the present case has recognised is that the dividend represents merely the shareholders share in the income of the company." This passage must however be read subject to the qualifying effect of the context of subjecta materies. The question at issue in that case was as to the proper construction of Section 14 (2) (a) of the Income-tax Act and in the passage to which counsel had made reference Sir George Rankin was attempting to explain the principle underlying that section. In any case it is clear that if there is no distinction between the dividend income of the shareholder and the income of the company, there would have been no need on the part of the Legislature to enact Section 14(2). The very fact that the section was enacted clearly indicates that but for the enactment of the section the shareholders would have been liable to pay tax on the dividend, though the company had already been assessed to tax. The dictum of Sir George Rankin does not, therefore, support the argument of the assessee in the present case.
Section 4 in The Income Tax Act, 1961 [Entire Act]
Section 95 in The Income Tax Act, 1961 [Entire Act]
The Premier Construction Co., Ltd. vs The Commissioner Of Income-Tax on 28 June, 1948
The very observation of Fletcher Moulton, L. J., in the Gramophone and Typewriter Ltd. case quoted above recognises that the shareholder is entitled to the profits of that business to a certain extent.
Commissioner Of Income Tax, Bihar And ... vs Raja Bahadur Kamakshya Narain Singh. on 2 September, 1946
For these reasons I think that the immediate and effective source of the dividend is the statutory contract between the company and the shareholders and the statutory declaration of a dividend at the general meeting of the shareholders. The legal position is that the articles of association bind the company and the shareholders as a statutory covenant, and the immediate and effective source of the dividend is the statutory covenant and not the agricultural operation carried on by the company. It may be that the source of the dividend is the agricultural operation of the company in the ultimate sense but in testing whether the income is agricultural within the meaning of Section 2(1) of the Act we must look not to the ultimate or remote source of the income but to the immediate and effective source. This view is borne out by the decision of the Judicial Committee in Commissioner of Income-tax v. Kamakshya Narayan Singh. The question at issue in that case was whether interest on arrears of rent in respect of agricultural land was agricultural income within the meaning of the Income-tax Act and was therefore exempt from tax. It was held by the Judicial Committee that interest on arrears of rent was not agricultural income and the argument of the assessee to the contrary effect was rejected as unsound. At page 328 Lord Uthwatt states : "Equally clearly the interest on rent is revenue, but in their Lordships opinion it is not revenue derived from land. It is no doubt true that without the obligation to pay rent - and rent is obviously derived from land -there could be no arrears of rent and without arrears of rent there would be no interest. But the affirmative proposition that interest is derived from land does not emerge from this series of facts. All that emerges is that as regards the interest, land rent and non-payment of rent stand together as cause sine quibus non. The source from which the interest is derived has not thereby been ascertained". Lord Uthwatt then proceeds to say :- "The word derived is not a terms of art. Its use in the definition indeed demands an enquiry into the genealogy of the product. But the enquiry should stop as soon as the effective source is discovered. In the genealogical tree of the interest land indeed appears in the second degree, but the immediate and effective source is rent, which has suffered the accident of non-payment. And rent is not land within the meaning of the definition".