Decided on June 19,1978

Y.N.S. HOBBS Respondents


Gopalan Nambiyar, C. J. - (1.) This reference was once heard and disposed of by our judgment, dated 11th November 1977. The question of law referred was answered in favour of the revenue land against the assessee. The assessee applied by C.M.P. No. 2468 of 1978 for rehearing on the ground that he had not been served with notice of the reference at the time when the case was heard on the earlier occasion. We allowed the application and directed that the matter be reheard. The reference has accordingly come on before us for rehearing.
(2.) The question of law sent up by the Income Tax Appellate Tribunal, Cochin Bench for our determination is: "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that Rs. 23,689 which represents the difference between 4585 and 4352 (converted into rupees) which was considered as income by the U.K. Income Tax Authorities for the U.K. assessment year 1964-65 was not the income of the assessee under the Indian Income Tax Act, 1961 -
(3.) The assessee, an individual, having income from salary in India, also received dividends from M/s Peirce Leslie and Co., Ltd., a company registered in the United Kingdom. The dividends were declared on 20th May 1964 and 30th November 1964, totalling in all to a net dividend of 2808.6-3. As the dividend was declared in the United Kingdom it was assessable there in the financial year 1964-65. The United Kingdom Authorities assessed the dividend at 4585 less certain deductions and reliefs. The reliefs were apportioned between the Indian income and the United Kingdom income and the assessee was granted the refund of 57 C Sh. 6p. by order, dated 8th September 1965. Then followed the assessment under the Indian Income Tax Act for the assessment year 1966-67 which was completed on 23rd November 1967. A sum of Rs. 44,695 by way of dividends declared on the two occasions, was included as foreign income, from Peirce Leslie and Company Ltd. This represented a total of 3352 2Sh. 7p. converted into Indian coinage at the prevailing rate of exchange. The assessment was reopened under S.147, by the Income Tax Officer, and a further sum of Rs. 23,689 was brought to tax, which represented the equivalent in terms of Indian currency of 1776 13 Sh. and 9p. at the current rate of exchange. The sum thus added was the difference between the net dividend of 2888. 6-3 received and assessed in the income tax assessment for 1965-66, as Indian income received during the year ended 31st March 1965, and the gross dividend of 4585 included in the United Kingdom assessment for 1964-65. The amount of Rs. 23,689 was treated as benefit accrued to the assessee for purposes of taxation.;

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