| Case ID |
1ee46019-fdd4-4a63-81ab-ba7be8cce5f4 |
| Body |
View case body. Login to View |
| Case Number |
MISC. CIVIL CASE No. 123 OF 1966 |
| Decision Date |
Aug 25, 1967 |
| Hearing Date |
|
| Decision |
The court held that the dividend income of the assessee-company should be calculated based on the market value of the shares on the date they were declared. The Income-tax Officer's determination that the dividend income should reflect the market value rather than the value fixed in the resolution was upheld. This decision emphasized that the shares received as a dividend were to be valued at their market price on the declaration date, rather than the value assigned in the company's internal resolution. The court concluded that the dividend income should reflect the actual monetary value received, aligning with the principles established in previous case law. |
| Summary |
This case revolves around the assessment of dividend income under the Income-tax Act, 1961. The central issue was whether the dividend income of Ujjain General Trading Society (P.) Ltd. should be computed based on the market price of shares on the date of declaration of the dividend or the value fixed by the company in its resolution. The Madhya Pradesh High Court ruled that the market price at the time of declaration should be used for assessment purposes. This decision underscores the importance of market valuation in tax assessments related to dividends. It highlights the legal interpretation of 'dividend' and how it impacts shareholders' income tax obligations. The ruling is significant for shareholders and companies alike, ensuring that the tax implications are fair and reflective of actual market conditions. The case further cites relevant legal precedents, emphasizing the need for clarity in financial reporting and tax assessments. |
| Court |
Madhya Pradesh High Court
|
| Entities Involved |
GRS Ltd.,
HC Ltd.,
Ujjain General Trading Society (P.) Ltd.,
P Company
|
| Judges |
P.V. Dixit, C.J.,
R.J. Bhave, J.
|
| Lawyers |
N.L. Chitaley for the Applicant,
M. Adhikari and P.S. Khirwadkar for the Respondent
|
| Petitioners |
Ujjain General Trading Society (P.) Ltd.
|
| Respondents |
Commissioner of Income Tax
|
| Citations |
1968 SLD 225,
(1968) 67 ITR 315
|
| Other Citations |
Ede (H.M. Inspector of Taxes) v. Wilson [1945] 26 Tax Cas. 381,
Kantilal Manilal v. CIT [1961] 41 ITR 275 (SC),
Weight (H.M. Inspector of Taxes) v. Salmon [1935] 19 Tax Cas. 174
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
143
|