Law:

Section:

Section 2(6A)(e) of the Indian income-tax act, 1922 [corresponding to section 2(22) of the income-tax act, 1961]-Deemed dividend-Assessee-huf, whose karta was a registered shareholder and director of two companies, took loans from these companies-Whether loans advanced to assessee by these companies liable to be assessed in the hands of assessee as dividend under section 2(6a)(e) of the 1922 act-Held, on facts, no Section 66 of the Indian income-tax act, 1922 [corresponding to section 256 of the income-tax act, 1961]-Reference-Question of law-Assessee-huf took loans from companies of which assessee's karta was a shareholder and director-Tribunal held that impugned loan was deemed dividend in assessee's hands-On reference, assessee contended that impugned loans could not be treated as deemed dividends in assessee's hands since assessee was not a registered shareholder of lender companies-Whether assessee's contention raised only a new aspect of question of law considered by tribunal and, therefore, could be admitted for first time by high court-Held, on facts, yes Facts H was a registered shareholder and director of two companies. He was also the karta of the assessee-HUF to which the said two companies had advanced certain loans. For the assessment years 1960-61 and 1963-64, the ITO treated the impugned loans as deemed dividends under section 2( 6A)(e) of the 1922 Act in the hands of the assessee. On appeal, the AAC directed the ITO to delete the additions of impugned loans to the assessee's income as deemed dividends. On second appeal, the Tribunal held that the ITO had rightly treated these amounts as income of the assessee by applying the provisions of section 2 (6A)( e) of the 1922 Act. On reference, the assessee contended, inter alia, that as the assessee-HUF was not a shareholder of the companies, section 2( 6A)(e) of the 1922 Act could not be invoked. On the other hand, the revenue contended, inter alia, that the aforesaid point did not arise out of the Tribunal's order as the same was not urged before the Tribunal and as such the assessee could not raise this question. Held 1. If a point of law is implicit in or covered by the question referred to by…

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