| Case ID |
1020006a-19d6-4243-8432-333e0685998b |
| Body |
View case body. Login to View |
| Case Number |
W.P. (C) NO. 3827 OF 2000 |
| Decision Date |
Jun 22, 2007 |
| Hearing Date |
|
| Decision |
The court upheld the validity of Section 115-O of the Income-tax Act, 1961, allowing Parliament to levy additional income-tax on dividends distributed by companies, including those with agricultural income. The court ruled that the classification of income as agricultural does not extend to dividends paid out of such income. The decision emphasized the distinction between agricultural income and dividend income, stating that dividends cannot be considered agricultural income merely because they originate from profits derived from agricultural operations. The ruling reinforces the principle that income tax on dividends falls under the Union List, thus affirming the legislative competence of Parliament to impose such taxes. |
| Summary |
In the case of George Williamson (Assam) Ltd. vs. Union of India, the Gauhati High Court addressed the constitutional validity of Section 115-O of the Income-tax Act, 1961, which imposes additional income-tax on dividends distributed by domestic companies. The petitioners contended that the Parliament lacked the legislative competence to enact this law, especially since a portion of their income was derived from agricultural activities. The court analyzed the definitions of 'agricultural income' and 'dividend', concluding that dividends, even if sourced from agricultural income, do not qualify as agricultural income for tax purposes. This landmark decision clarifies the legislative authority of Parliament over taxation matters and affirms the separation between agricultural income and dividends, establishing a firm precedent for future cases. This ruling is significant in the context of tax law, particularly for companies in the agricultural sector, and emphasizes the need for clarity in the taxation of income derived from diverse sources. |
| Court |
Gauhati High Court
|
| Entities Involved |
Not available
|
| Judges |
D. Biswas,
H.N. Sharma
|
| Lawyers |
Dr. D. Pal,
Dr. A.K. Saraf,
Mr. U. Bhuyan,
Mrs. S.D. Bhuyan,
Mrs. K.M. Talukdar,
B.K. Das,
B. Chakravorty,
A. Hazarika
|
| Petitioners |
George Williamson (Assam) Ltd.
|
| Respondents |
Union of India
|
| Citations |
2007 SLD 3769 = (2007) 292 ITR 322
|
| Other Citations |
CIT v. Khatau Makanji Spg. & Wvg. Co. Ltd. AIR 1960 SC 1022,
Mrs. Bacha F. Guzdar v. CIT [1955] 27 ITR 1 (SC),
Tata Tea Ltd. v. State of West Bengal [1988] 173 ITR 18 / 39 Taxman 76 (SC),
Khatau Makanji Spg. & Wvg. Co. Ltd. v. CIT [1956] 30 ITR 841 (Bom.),
Jayshree Tea & Industries Ltd. v. Union of India [2006] 285 ITR 506 (Cal.),
Gannon Dunkerley & Co. v. State of Rajasthan [1993] 88 STC 204 (SC),
CIT v. Vadilal Lallubhai/Sakarlal Balabhai [1972] 86 ITR 2 (SC),
Empire Jute Co. Ltd. v. CIT [1980] 124 ITR 1 /3 Taxman 96 (SC),
Anglo-American Direct Tea Trading Co. Ltd. v. CAIT [1968] 69 ITR 667 (SC),
CIT v. Ajax Products Ltd. [1965] 55 ITR 741(SC),
CIT v. Mother India Refrigeration Industries (P.) Ltd. [1985] 155 ITR 711/ 23 Taxman 8 (SC),
Ajay Hasia v. Khalid Mujib Sehravardi AIR 1981 SC 487,
R.M.D. Chamarbaugwalla v. Union of India AIR 1957 SC 628,
S. Kumaraswami v. ITO [1961] 43 ITR 423 (Mad.),
Raja Bahadur Vishweshwara Singh v. CIT [1954] 26 ITR 573(Pat.),
C.M. Kothari v. CIT [1958] 34 ITR 317 (Mad.),
J. Thomas & Co. v. CAIT [1958] 34 ITR 454 (Cal.),
Av.R.A. Veerappa Chettiar v. CIT [1959] 35 ITR 322 (Mad.),
Peiree Leslie & Co. Ltd. v. CIT [1960] 38 ITR 356 (Mad.),
M.P.V. Sundararamier & Co. v. State of A.P. AIR 1958 SC 468
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| Laws Involved |
Income-tax Act, 1961
|
| Sections |
115-O,
2(1A)
|