Sankar Prasad Mitra, J. - (1.) The assessment year, in this reference under Section 66 (1) of the Indian Income-tax Act, 1922 is 1961-62. The corresponding accounting year is R. N. 1961. The assessee is a shareholder of the North Bengal Sugar Mills Co. Ltd. The registered office of this company is in Calcutta but its mills are in East Pakistan. The company's profits arise wholly in Pakistan. For the previous year relating to the assessment year 1960-61 the company is said to have declared dividend on the 6th October, 1960. The assessee's share of such dividend should have amounted to Rs. 8,000/-.
(2.) Before the Income-tax Officer the assessee contended that the said sum of Rupees 8,000/- was not assessable in her hands since the company did not issue any dividend warrants and its declaration of dividend was subject to remittance from Pakistan. In fact, by consent of parties the company's relevant resolutions have been placed before us. The resolutions run thus: "A dividend aggregating Rs. 60,000/- be and is hereby declared to the preference shareholders subject to taxation and remittance from Pakistan." "A dividend aggregating Rs. 1,20,000/- be and is hereby declared to ordinary shareholders subject to taxation and remittance from Pakistan."
(3.) The assessee's contention before the Income-tax Officer was that the declaration was merely a conditional declaration and it had not given the shareholders any immediate rights to claim any dividends from the Company. The Income-tax Officer rejected this contention and included the said sum of Rs. 8,000/- in the assessee's total income.;