Law: Income Tax Act, 1922

Section: 66(1),15BB,2(6C),14(3)(c),16(2),5(3)(vii i),2(15),4(1),18(5),49(B)

Income-tax Act, 1922 -Section 15BB -- Dividend -Company enjoying tax-holiday -Income from dividend declared out of company's profits -Whether exempt in the hands of shareholders -Held yes -- Purpose of Section 15BB -Exemption -Company enjoying tax-holiday -Dividend received by assessee from a company enjoying tax-holiday is merely his determinate share in the income of the undertaking -Exemption, was therefore, in respect of profits whether they were in the hands of company or had reached the ultimate beneficiary, viz. shareholder as dividends -- JUDGMENT The judgment of the court was delivered by MUSHTAQ HUSSAIN J.--The assessee, who is a shareholder of Sh. Fazal Rehman & Sons Ltd., Multan, declared dividends amounting to Rs. 1656 out of profits of the Company. The Company enjoyed a tax-holiday under Section 15BB of the Income-tax Act. The Income-tax Officer, however, assessed this income to tax. The assessee successfully appealed to the Appellate Assistant Commissioner and the appeal of the Commissioner of Income-tax against this order was dismissed by the Income-tax Appellate Tribunal. The Commissioner of Income-tax has, therefore, referred the following question to us for opinion under Section 66(1) of the Income-tax Act:-- "Whether on the facts and in the circumstances of the case, the Tribunal was justified in holding that income from dividend declared out of the Company's profits exempt under Section 15BB of the Income-tax Act is also exempt from tax in the hands of the shareholders of the Company." 2. Section 15BB of the Income-tax Act runs as follows:-- "Section 15BB.--Subject to the provisions of this Act, the income, profits and gains of an industrial undertaking set up in Pakistan between the 1st day of April, 1959, and the 30th day of June 1965 (both days inclusive) shall be exempt from Income-tax Act for a period of four years beginning with the month in which the undertaking is set up or the commercial production is commenced, whichever is the later. . .". It is, of course, admitted that this section is applicable to the Company, dividends from which are sought to be taxed in the hands of the assessee. It is not disputed that the income of…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492