COMMISSIONER OF INCOME TAX, WEST BENGAL Vs. SUDHIR KUMAR SEN. (DECEASED REPRESENTED BY HIS LEGAL HEIR).

JUDGEMENT

(1.) BANERJEE , J. - By an order under Sec. 66(2) of the Indian Income Tax Act, this court called upon the Appellate Tribunal to send a statement of case on the following question of law : "Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the amount included as dividend in the total income of the assessee in consequence of an order under Sec. 23A in the case of Messrs. S. K. Sen & Sons Ltd. should be excluded on the ground that the assessee was not the registered shareholder ?"

(2.) THE question of law arises in the circumstances hereinafter stated. There was a firm known as Messrs. Sen and Pundit. The assessee Sudhir Kumar Sen, was, at one time, a partner of the said firm. The firm above named was a shareholder of a limited company known as Messrs. S. K. Sen and Sons Limited. On or about September 26, 1951, the firm known as Messrs. Sen and Pandit was dissolved and its assets and liabilities were taken over by a private limited company named Messrs. Sen and Pandit Private Limited. The transfer of assets to the last named private company included the shares held by Messrs. Sen and Pandit firm in the company know as Messrs. S. K. Sen and Sons Limited. Messrs. Sen and Pandit Private Limited, however, did not take steps to have their names mutated in the books of Messes S. K. Sen and Sons Limited, in respect of the shares which they took over.

(3.) THERE were two orders made by the Income Tax Officer against Messrs. S. K. Sen and Sons Limited, under Sec. 23A, as it stood prior to the amendment of 1955, for the two assessment years in question and two different amounts were deemed to have been distributed as dividends to the shareholders of Messrs. S. K. Sen and Sons Limited. Since Messrs. Sen and Pandit firm, the registered shareholder, stood dissolved at the time when the Income Tax Officer made the order under Sec. 23A, a proportion of the dividend deemed to have been received by Messrs. Sen and Pandit was included in the income of the assessee as a partner of the firm, which was registered shareholder.