HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Dhandhania Kedia & Co. v. Commissioner of Income-tax
Civil Appeal No. 433 of 1957
[1959] Supp. 1 SCR 204 ·
Indian Income-tax Act, 1922: sections 2(6A)(c), 2(11)
Sources & disclosures includedDownload original judgment / order
3-judge bench · T. L. Venkatarama Aiyar · P. B. Gajendragadkar · A. K. Sarkar
Assessment years: 1951-52
01 · Facts of the case
After a Udaipur company entered liquidation, its shareholder received Rs. 26,000 from profits accumulated in six preceding accounting years. Income-tax had not operated in Udaipur in those years, but the distribution occurred after its extension to Rajasthan.
02 · Discussion by the Hon’ble Court
The technical definition of previous year was repugnant to this context. The six previous years meant the company’s financial accounting years preceding the liquidation year, not six years each requiring a prior tax assessment. The provision assimilated liquidation distributions of accumulated profits to dividends within its stated historical limit.
03 · Judicial decision
The Rs. 26,000 distribution was dividend under section 2(6A)(c) and chargeable to tax.
04 · Outcome / in whose favour
Assessee appeal dismissed with costs. A new dispute over whether the entity qualified as a company was not entertained because it involved disputed facts and had not arisen from the Tribunal’s order.
05 · AKHB REVIEW POINT
Read statutory definitions with their contextual qualification. Distinguish taxation of the distribution from whether the underlying profits were earned in a territory then subject to income-tax.
Source & verification
Download original judgment / order · Open cited source rendition
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Statutory scope
Historical legislation expressly identified in this note. This is not a decision under the Income-tax Act, 1961 or the Income-tax Act, 2025. Verify enacted wording, commencement, transition and subsequent judicial treatment independently before modern reliance.
Later treatment
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