Sankar Prasad Mitra, J. - (1.) In this reference under Section 66(1) of the Indian Income-tax Act, 1922, the assessment years involved are 1953-54 and 1954-55. The corresponding previous years were the financial years ending on the 31st March, 1953, and the 31st March, 1954, respectively. The assessee is the managing director of Messrs. Hotels (1938) Ltd. and other associated companies controlling a number of hotels in India. The assessee showed the income of Rs. 66,694 and Rs. 87,570 for the said two financial years respectively as gross dividends derived from certain shares he had held. The particulars of these shares are as follows : 1. Associated Hotels of India Ltd. ... 1,09,606 shares 2. Northern India Caterers Ltd. ... 20 shares 3. Oberoi Hotels (I) Ltd. ... 10 shares
(2.) The Income-tax Officer found that besides these shares, the assessec's wife and two sons held certain shares of the Associated Hotels of India Ltd and the Northern India Caterers Ltd. and he included the gross dividends thereof for the year 1953-54 and the net dividends thereof for the year 1954-55 in the total income of the assessee. The particulars of these shares are as under : -------------------------------------------------------------------------------- Year Name of shareholders Gross Dividend -------------------------------------------------------------------------------- 1953-54 Rs. 1. Smt I D. Oberoi, wife of the assessee: (a) 15,886 shares of Associated Hotels (I) Ltd. ... 3,971.00 (b) 30 shares of Northern India Caterers Ltd. ... 15,273.00 2. Mr. T. R. Oberoi, son of the assesses: (a) 50 shares of Northern India Caterers Ltd. ... 25,454.00 (b) 6,823 shares of Associated Hotels (I) Ltd ... 1,706.00 3. Mr. P.R.S. Oberoi, son of the assessee : (a) Northern India Caterers Ltd. (20 shares) ... 10,182.00 -------------------------------------------------------------------------------- Rs. 56,586.00 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Year Name of shareholders Net Divident -------------------------------------------------------------------------------- 1954-55 Rs. Smt. I. D. Oberoi ... 15,886 shares of Associated Hotels ... 3,177.00 30 shares of Northern India Caterers Ltd. ... 10,500.00 Sri T. R. Oberoi ... 50 shares of Northern India Caterers Ltd. ... 17,500.00 6,823 shares of Associated Hotels of India Ltd. ... 1,365.00 Sri P.R.S. Oberoi ... 20 shares of Northern India Caterers Ltd. ... 7,000.00 -------------------------------------------------------------------------------- Rs. 39,542.00 -------------------------------------------------------------------------------- --------------------------------------------------------------------------------
(3.) The Income-tax Officer has held that the wife and the two sons are the assessee's benamidars. He has stated as follows : " It is seen from the past records that...... shares standing in the names of the assessee's wife, Smt. I. D. Oberoi, and the assessee's two sons, namely, Mr. P. R. S. Oberoi and Mr. T. R. Oberoi do in fact belong to the assessee and are hts own investments. The facts have also been admitted by the assessee before the department in the past years. The income from these shares is, therefore, to be rightly included in the hands of the assessee and assessed accordingly.";