Supreme Court Of India
Income Tax Officer & Anr. vs. S. Radha Krishnan & Anr.
Sections 2(24)(ii), 56
Asst. Year 1972-73
S.P. Bharucha & D.P. Mohapatra, JJ.
Civil Appeal Nos. 6050 to 6052 of 1990
10th December, 1998
K.N. Shukla with C.V.S. Rao & B.K. Prasad, for the Appellants : None, for the Respondents
BY THE COURT :
The respondent has been served but does not appear. The respondent objected to the inclusion of a sum of Rs. 34,375 representing the gross dividend from a company called BMS Private Limited for the asst. yr. 1972-73. The assesseeâs case was that, by virtue of s. 104 of the IT Act, 1961, the said amount had already suffered tax because it was undistributed profits in the hands of the company; when it was distributed to the companyâs shareholders thereafter, the levying of further tax thereon amounted to double taxation. The objection was rejected by the authorities, whereupon a writ petition was filed before the High Court. By the order under appeal, a learned single Judge upheld the case of the assessee on the basis that taxation of the same amount in the hands of the company and the shareholder amounted to double taxation.
2. The learned Judge was in error. The question of double taxation must be decided having regard to who the assessee is. If the assessee is different, the question of double taxation would not arise. In the present case, the fact that the company had been made liable to tax on the amount did not mean that that amount, when paid as income to the shareholder, could not be taxed as income in the hands of the shareholder. The character of the amount changed, it being now the income of the shareholder.
In the premises, the appeal is allowed. The judgment and order under appeal is set aside. The writ petition filed by the respondents in the High Court is dismissed. No order as to costs.
[Citation : 254 ITR 561]