LexPURSHOTTAMDAS THAKURDAS versus COMMISSIONER OF INCOME-TAX, BOMBAY
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1962 R. S. Pandit v. Stale of Bihru Subba Rao, /. 1961 December, .f. 668 SUPREME COURT REPORTS [1963) SUPP. objection is an afterthought and cannot be allowed to be raised at this stage of the proceedings. The appeal fails and is dismissed. PURSHOTTAMDAS THAKURDAS v. COMMISSIONER OF INCOME-TAX, .l:IOMBAY (S. K. DAS, J. L. .KA.PUlt, A. K. SARKAU, M. HIDAYATULLAH and RAGHUBAR DAYAL, JJ.) Income Tax-Advance payment of tax-Dividena income deducted from total income-If allowable-" lJeductiM of income- tax at the time of payment", Mcm1iny of-Company paying t"" on <livirlend-Paymcnt of dividencl lo sliare-lwlder-IVhetlwr fa,i.· 1lcduclctl at the ti1nc of z1ayntent-Indian, Income-tax ,,J.ct, 11122 (II of liJ2:!), •s. JU, IS, 11!-A, 19-B. 'l'hc asscsscc .subn1ittcd his e:;timate of inco1uc for advance paymeut of tax under '· IG-A, in which he did not include his dividend income. The Income-tax Ofliocr held that under s. 18-A(2) the assessec was bound to indnde in his estimate, and to pay advance super· tax, on his dividend income. Since titat was not done a11d the advance tax paid was Jess than 00%, of the lax determined on regular assessment, he levied penal interest under s. 13-A(6) in respect of the supcr·-tax payable on the dividend income. The assessee contended (i) that the dividend income was income in respect of which provision \Vas made under s. 18 for "deduction of income-tax at the time of payment" and as such s. 18-A was not applicable to it, and (ii) that since s. 18(5) was applicable to dividend income the penal provisions of s .. 18-A(6) were not attracted. llcld, (per Das, Kapur and Hidayatullah, .J.J., S.u'k'il' aud !Jayal,JJ., ,[i.,-.1<H11g) that •· IC(5) read with ss. 16(~) and 49-B provid•d for the "deduction uf income-tax at the time of payment" in respect of dividend income and therefore s. 1 a.A did not app1y to such inco1ne. A shareholder's right to the dividend arises upon its declaration. Under the legal fiction 2 S.C.R. SUPREME COURT REPORTS 669 introduced by s. 49-ll, when dividend is paid to a shareholclr.r by a conlpany which is a.ssesi;;ed to tax, the inr.01nf.·ta!'t (hue not s11per·tax) i11 respect of such dividend i'i (lr.en1t"<r co h:l\'e heen paid by the shn:-cholder hirnse)f antl credit is gh·cn tht"refor to him under s. 113(5). If the shareholder "''H deemed to have paid the tax himself at the time when the company paid the divi- dend, the payment was "deduction of income-tax at thr time of payment" within the meaning of s. 18-A( l). I'a Sarkar and Dayal,Jj.-The diddend income should have been included in the estitnate of income and the penal interest \vas properly levied on the assessee. Dividend income is not one on which tax was deducted at the time of payment under s. !fl. Payn;ent of tax by the asscssce, fictional or other- wise, on income rec~iYed by him was not a deduction of tax under s. lB by tht; person \Vho- paid the income to the assessee-. ]''or purpnses of s. I 11-1\ there had to Le a deducti1Jil under s. l H,: cleducUon under other provisions \\'as not relevant. Under s. lfl(:j) credit for the tax paid by the company was to be gi\·en to the shareholder not at tl1e tin1e of payment of the dh·klend hut later at the time of assessn1ent. Further, the provisions of s. 13-A(<i) were applicable in respect of diddend income. 'fhe \Vords "income.to ,.,.·hich provjsions ofs. 18 do not apply" in s. 18.\(6) refer to that type of income in respect of which s. 13 provides for deduction of tax at the source and they do not include dh·idr-nd income. CIVIL APPELLATE JURISDICTION : Civil Appeal No. 597 of 1Q6I. Appeal from the judgment and order dated .July 3, 1959, of the Bombay High Court in I. T. Reference No. 45 of 1958. A. 1'. Viswcmatha Nastri, N. J. B. Dadachanji, 0. 0. JJfathur Ncirain, for the appellant. A. Palkhivala, and Ravinder K. N. Rajagopal Sastri and R. N. Saohthey, for the respondent. l!l62. December 4. The Judgment of Das, Kapur and Hidayatullah, J.J., was delivered by Das, J. The Judgment of Sarkar and Dayal, JJ., was delivered by Sarkar, J. 1962 PtJrsh.:iJtamda~ 'Jftal:urJ;n v. Commih'ionu of lncome·Ta.t, Bombay 1962 Pttrslloltamdas T111Jimrdas v. Commissioner of f11r,ome·Ta\', Bombay Das, J, 670 SUPREME COURT REPORTS [1963] SUPP. S. K. DAR, J.·-This is an appeal on a certifi· catc of fitness granted by the High Court of Bombay under s. 66·A(2) of the Indian Income-ta
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