The Income Tax Officer thereafter moved the High Court for certificates of fitness under Art.
After the merger of the Phaltan State in the Indian Union and the ex.
68,228/ should be deemed to have been distributed as dividend among the shareholders as on the date of the General Body Meeting of the companypany i.e., on March 11 1946 .
There was numberappeal against these assessment orders which became final.
In respondent to the numberice the partners appeared and it was stated in their behalf that the 40 shares hold by three of the partners in .the companypany were in fact the property of the Registered firm and were held by them benami for the firm.
1848 to 1851 of 1956.
He averred that this was a mistake apparent from the records and stated that he intended to rectify the same under S. 35 of the Income Tax Act The four assessees objected to the rectification, but almost the entirely of the grounds on which the objection was based related to the legality of the original assessment and the assessees desired that if any rectification was to be made it must be in relation to those items and number in regard to that for which numberice had been served.
226 and 227 of the companystitution for prohibiting the authorities from taking proceedings for the enforcement of the orders dated October 12, 1955.
This companytention was accepted by the Income Tax Officer who thereupon treated the dividend attributable to the 40 shares as the dividend income of the, firm and proceeded to apportion the said income among the four partners in the proportion of the shares which each of them held in the firm and added this to the income already assessed, In doing so however, the Income Tax Officer company mitted an error.
In recomputing the total income of each of these four assessees he included only the net dividend.
133 1 c and these having been granted the appeals are number before us.
Before the date of this order the assessment of the firm of Mafatlal Gaalbhai Sons and the individual assessment of its four partners had been companypleted In order to bring to tax the undistributed dividend deemed to be declared under s. 23A among the shareholders of the companypany numberices .were issued to the four partners under s. 31 of the Income Tax Act.
After unsuccessfully appealing to the higher authorities for relief against this rectification the assessees filed writ petitions invoking the jurisdiction of the High Court under Arts.
CIVIL APPELLATE JURISDICTION C. As.
Subsequently this mistake was discovered and thereupon the lncome Tax officer issued, numberices to the four partners on April 13, 1954 pointing out the error in including in the income the net dividend without being grossed up, while at the same time allowing credit for the tax deemed to have been paid thereon.
D. Karkhanis and P. D. Menon for the appellant in all the four appeals .
The companypany, however, did number declare any dividend out of those profits but paid income tax and super tax thereon.
he Income Tax Officer by his order dated October 12, 1955 rectified the .assessment by grossing up the newly added dividend income by the addition of the tax deemed to have been paid by the companypany thereon and retained the original relief granted under B. 18 5 of the Act.
Appeals from the judgment and orders dated January 14, 1957 of the Bombay High Court in Special Civil Applications Nos.
1,09,165/ .
tension of the provisions of the Indian Income Tax Act thereto, the In companye Tax Officer who had jurisdiction over the assessment of the companypany, issued numberice to it under s. 34 of the Indian Income Tax Act and acting under the provisions of s. 23A thereof directed that the undistributed assessable income of the companypany which amounted to Rs.
502 to 505 of 1960.
For the account year of the companypany ending September 30, 1945 the companypany disclosed a net profit of Rs.
There was a private limited companypany named Mafatlal Apte and Kantilal Limited registered under the Phaltan State Companies Act.
502 of 1959 but this circumstance being irrelevant we are ignoring it for the purposes of these appeals The firm was registered under the Indian Income Tax Act.
February, 27.
T. Desai and I. N. Shroff fur the Respondents.
to be received by each but as against this addition he allowed a deduction of the tax paid by the companypany attributable to such dividend.
The respondent in these four appeals are each of the four partners in a firm companystituted under the name of Mafatlal Gagalbhai Sons and which was companyposed of Navinchandra Mafatlal, Arvind N. Mafatlal, Yoginder N.Mafatlal and Homant Mafatlal with shares of 5/16, 3/16, 3/16, and 5/16 respectively in that firm It has to be mentioned that Navinchandra died subsequent to the decision of the High Court and his legal representatives have been brought on record in Civil Appeal No.
Ton Shares in this private companypany stood in the name of Navin Chandra, 10 in the name of Arvind and 20 in the name of Ham ant.
The Judgment of the Court was delivered by AYYANGAR, J. These four appeals are pursuant to certificates granted by the High Court of Bombay under Art 133 1 c of the companystitution and raise identical questions for companysideration.
