Judgment

KHANNA, J. :- These two appeals by special leave are directed against the judgment of Calcutta High Court whereby it answered the following question referred to it under Section 66 (1) of the Indian Income Tax Act, 1922 in the negative in favour of the revenue:

"Whether on the facts and in the circumstances of the case, the Tribunal was justified in excluding from the assessable income of the assessee for the assessment years 1953-54 and 1954-55 the sums of Rupees 56,586 and Rs. 39,542 which were the amounts of divident received by the assessee s wife and two sons from shares acquired out of the profit of the assessee?"

2. The matter relates to assessment years 1953-54 and 1954-55, the corresponding previous years for which ended on March 31, 1953 and March 31, 1954 respectively. The appellant-assessee is the Managing Director of Messrs Hotels (1938) Ltd. and other associated companies controlling a number of hotels in India. For the assessment years 1953-54 and 1954-55, the appellant showed incomes of Rupees 66,694 and Rupees 87,570 as the gross dividend derived by him from the following shares held by him:

(i) Associated Hotels of India Ltd. 109,606 shares

(ii) Northern Indi