1. Taxability of dividends — Dispute concerning the timing of delivery of dividend warrants to the assessee. (Para 1 )
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1970 Supreme(SC) 246
SUPREME COURT OF INDIA
A.N.Grover : J.C.Shah : K.S.Hegde
Commissionfr Of Income Tax, Calcutta
Versus
Bikaner Trading Company Limited
Case No. : 699 , 700 of 1968
Date of Decision : 4/28/70
The burden of proof to establish that an amount is taxable because it was received within a specific year of account lies with the revenue department.
Headnote:(A) Income-tax - Burden of proof - Taxability of dividends - In the absence of evidence to show that dividend warrants were handed over to the assessee within the relevant years of account, the assessee cannot be held liable to pay income-tax on the dividends received - The burden of proving that an amount was taxable because it was received in the year of account lies upon the department. (Para 1)
Facts of the case:
The matter concerned the determination of the specific time when dividend warrants were delivered to the assessee for the years of account ending 30/06/1955 and 30/06/1956. A supplementary statement of case was sought to clarify the delivery date, but it was observed that there was no information on record regarding when the warrants were handed over.
Findings of Court:
Since there was no evidence to show that the dividend warrants were handed over to the assessee within the specified years of account, the assessee is not liable to pay income-tax on those dividends.
Issues: Whether the assessee is liable to pay income-tax on dividends in the absence of evidence regarding the date of delivery of dividend warrants.
Ratio Decidendi: The burden of proving that an amount was taxable because it was received in a particular year of account rests with the revenue department.
Result: Appeals fail and are dismissed.
Legal Category Hierarchy
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tax law
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income tax
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evidence and burden of proof
- receipt of income (Para 1)
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evidence and burden of proof
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income tax
Table of Contents
2. Whether dividend warrants were delivered to the assessee within the relevant years of account to render the dividends taxable. (Para 1 )
3. Absence of evidence regarding the delivery of dividend warrants within the specified account years precludes a finding of tax liability. (Para 1 )
4. The burden of proving that an amount was taxable because it was received in the year of account lies upon the department. (Para 1 )
5. Appeals dismissed; no order as to costs. (Para 2 )
6. Who bears the burden of proof regarding the timing of receipt of income for tax purposes?
The burden of proving that an amount was taxable because it was received in a particular year of account lies upon the tax department. (Para 1 )
7. What is the legal consequence if there is no evidence of the delivery of dividend warrants within the relevant account years?
In the absence of evidence showing that dividend warrants were handed over to the assessee within the relevant years of account, the assessee cannot be held liable to pay income-tax on those dividends. (Para 1 )
J.C. SHAH, J.
(1) BY our Order, dated 12/02/1969, we directed the Income-tax Appellate tribunal to submit a supplementary statement of case "with regard to the point of time when the dividend warrants were delivered to the assessee". The tribunal has submitted a statement of case, and has observed that there is no information on record as to when the dividend warrants were handed over to the assessee. la the absence of any evidence to show that the dividend warrants were handed over to the assessee within the years of account ending 30/06/1955 and Ju 30/06/1956, it cannot be held that the, assessee is liable to pay income-tax on the dividends received by it. The burden of proving that an amount was taxable because it was received in the year of account lay upon the department, and in the absence of the information called for they are not liable to be taxed.
(2) THE appeals fail and are dismissed. There will be no order as to costs.
