HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Commissioner of Income-tax, Bombay v. Jalgaon Electricity Supply Co. Ltd.
Civil Appeal No. 477 of 1957
[1960] (3) SCR 880 ·
Finance Acts, 1949 and 1950: paragraph B, Part I of respective Schedules
Sources & disclosures includedDownload original judgment / order
3-judge bench · S. K. Das · J. L. Kapur · M. Hidayatullah
Assessment years: 1949-50, 1950-51
01 · Facts of the case
The company paid dividends above its assessed income, which had been reduced by depreciation and deductions. No profits were brought forward from earlier years. The Tribunal majority and High Court held the additional-income-tax calculation inapplicable.
Source: Primary report: SCR 882–883
02 · Discussion by the Hon’ble Court
The statutory fiction required sufficient undistributed profits of preceding years not already used to cover another excess dividend. Without those profits both the fiction and the calculation mechanism failed. Liability could not first be assumed or the provision rewritten to achieve perceived fairness.
Source: Primary report: SCR 884–887
03 · Judicial decision
Although excess dividends existed, no additional tax arose under these provisions on the recorded facts.
Source: Primary report: SCR 885–887
04 · Outcome / in whose favour
Revenue’s appeal was dismissed with costs.
Source: Primary report: SCR 887
05 · AKHB REVIEW POINT
Apply the complete charging/calculation mechanism and its factual predicates. Separate this decision from the preceding Khatau Makanji judgment whose ending appears on the first page; neither permits a general present-day exemption for excess dividends.
Source: Primary report: SCR 880, 884–887
Source & verification
Download original judgment / order · Open cited source rendition
Complete 8-page Supreme Court Reports scan. Any adjoining report fragments remain in the unchanged original and are excluded from this analysis.
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
Source checked 2026-10-23. Subsequent treatment and present-law applicability have not been comprehensively checked.
Page references identify the supplied PDF; paragraph references identify the judgment unless stated otherwise.
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General legal and tax research only; not legal or tax advice. Verify the complete judgment, applicable statutory version and subsequent treatment before reliance. AKHB REVIEW POINT is editorial analysis, not the Court’s holding.