JUDGMENT - CHAGLA, C. J. :

M/s. Narandas Rajaram and Co. Ltd., carried on business both in taxable territories and also in Pakistan. During the S. Y. 2007 (10th of November, 1950 to 30th of October, 1951), profits accrued to this Company both in India and Pakistan. On 14-10-1952, the company declared dividend for S. Y. 2007. The total dividend in respect of the shares held by the assessee came to Rs. 1,71,992, and the dividends were declared out of profits which partly accrued in India and partly in Pakistan. The resolution declaring the dividends states :

A moiety of the amount of the dividend be paid to the share-holders on and after 16-10-1952, whose names appear on the Register of the Company as on 6-10-1952, and the other moiety be postponed for payment within two months from the date on which remittances from Pakistan become free and the monies are actually received." Now, the dispute arises with regard to the moiety of dividends which were to be paid two months after remittances from Pakistan became free and the moneys were actually received. The contention of the Department was that these dividends were liable to tax for the assessment year 1953-54, and the assessee contende

Click Here to Read the rest of this document