Law:

Section:

- Section 66(1) - Indian Income-tax Act, 1922 CASES REFERRED TO J. Dalmia v. Commissioner of Income-tax [1964] 53 I.T.R. 83 (SC) and Ramesh R. Saraiya v. Commissioner of Income-tax [1965] 55 I.T.R. 699 (SC). JUDGMENT 1. This reference under section 66(1) of the Indian Income-tax Act is at the instance of the Commissioner of Income-tax, Bihar and Orissa, in respect of the assessment year 1950-51. The relevant accounting year of the assessee was beginning from the 1st November, 1948, and ending on the 30th October, 1949. The question under reference is in regard to the assessability to income-tax of a dividend declared on shares held by the assessee. The declaration of the dividend was on the 30th December, 1948, but the resolution making such declaration also made it clear that the dividend was payable on the 15th February, 1949. Before the date of the payment of the dividend, the shareholder-assessee sold his shares on the 29th January, 1949. The department claimed that, since the dividend had been declared before the assessee parted with his shares, he should be assessable on that amount. The contention of the assessee was that, as the . dividend was not unconditionally available to him before the date of the transfer of the shares by him, he was not assessable in respect of that dividend. 2. The contention of the assessee was correct in our view. If the payment of the dividend had not been postponed at the same time when it was declared, it would have been,…

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