Banerjee, J. - (1.) This reference, under Section 66 (1) of the Income-tax Act, has been made in circumstances hereinafter related.
(2.) During the accounting year ended on March 31, 1959, (the assessment year being 1959-60) the assessee held 4,58,071 shares in a company known as Pilani Investment Corporation Ltd. and became entitled to receive as dividend Rs. 1,83,228.40 P. at the rate of 40 P. per share, namely, the declared rate of dividend. This dividend was paid to the assessee in the form of, JUDGEMENT_236_AIR(CAL)_1969Html1.htm The Income-tax Officer valued the shares of Gwalior Rayon and Silk Manufacturing Co. Ltd. and Hind Cycles Ltd., at the market rate, namely, at Rs. 14.60 p. per share for Gwalior Rayon and Silk Manufacturing Co. Ltd and at Rs. 128.50, per share, for Hind Cycles Ltd. and came to the conclusion that the total shares, received by the assessee in the aforesaid two companies, were equivalent in terms of money to Rs. 2,44,526/-. Since the assessee had shown the value of the shares at Rs. 1,82,870/- only he added back the difference between Rs. 2,44,526/- and Rs. 1,82,870/- namely, Rs. 61,656/- to the assessee's income as dividend.
(3.) On appeal by the assessee, the Appellate Assistant Commissioner dismissed the appeal with the observation that the money's worth of the shares received by the assessee represented the assessee's income and came under the definition of dividend as in Section 2 (6A) of the Indian Income-tax Act.;