M. Hidayatullah J. - (1.) M/s. Howrah Trading Company, Ltd., Calcutta (hereinafter called the assessee) obtained on April 28, 1955, a certificate under S. 66A(2) of the Indian Income-tax Act from the Calcutta High Court, to appeal to this Court against the judgment dated August 31, 1954, in Income-tax Reference No. 57 of 1953. The Divisional Bench (Chakravarti C. J. and Lahiri J.) in the judgment under appeal merely followed their earlier judgment delivered the same day in Income-tax Reference No. 22 of 1953, since reported as Hindustan Investment Corporation vs. Commissioner of Income-tax, 1955-27 ITR 102. It is the latter judgment which gives the reasons for the decision.
(2.) The facts of the case hake been stated with sufficient fulness, yet briefly, in the statement of the case submitted by the Income-tax Appellate Tribunal (Calcutta Bench) and may be conveniently set out in its own words: "The applicant had received sums of Rs. 3,831, Rs. 6,606, Rs. 7,954 and Rs. 8,304 in the four years, respectively (assessment years, 1944-45, 1945-46, 1946-47 and 1947-48) as income from dividends. The shares in respect of which this dividend income was received were the property of the Applicant but in the books of the various companies these stood in the names of other persons. It appears that these shares were purchased by the Applicant from other persons under a blank transfer but the transfers had not been registered with the various companies. The Applicant's claim in these income-tax proceedings was that these shares although not registered in the name of the applicant were the property of the applicant. It was further claimed that this dividend income should be grossed up under S. 16(2) and credit for the tax deducted should be allowed to the Applicant under S. 18(5)." The Income-fax Officer did not accept this claim, and the appeals of the assessee were rejected by the Appellate Assistant Commissioner of Income-tax, Calcutta, "A" Range and by the Appellate Tribunal. The Tribunal, however, on being moved, referred the following question to the High Court: "Whether in the facts and circumstances of this case, the Applicant (the assessee) was entitled to have this dividend income grossed up under Section 16(2) and claim credit for tax deducted at source under S. 18(5) of the Income-tax Act - The High Court answered the question in the negative, thus affirming the decisions of the Department and the Appellate Tribunal.
(3.) The assessee contends that the decision of the High Court is erroneous, and that it is entitled to have the dividend income 'grossed up' under S. 16(2) and also to claim credit for tax deducted at source, under S. 18(5) of the Income-tax Act.;