HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Purshottamdas Thakurdas v. Commissioner of Income-tax, Bombay
Civil Appeal No. 597 of 1961
[1963] Supp. 2 SCR 668 ·
Indian Income-tax Act, 1922: sections 16, 18, 18A and 49B
Holding and result. By majority, the statutory credit for company-paid tax on dividends amounted to the relevant deemed deduction at payment, so advance-tax section 18A did not apply to that dividend income. The appeal was allowed; two judges dissented.
Sources & disclosures includedDownload original judgment / order
Five-judge bench with a two-judge dissent · S. K. Das, J. · J. L. Kapur, J. · A. K. Sarkar, J. · M. Hidayatullah, J. · Raghubar Dayal, J.
01 · Facts of the case
The assessee omitted dividend income from his advance-tax estimate. The Officer treated it as includible and levied interest because advance tax paid was below the statutory percentage of regular-assessment tax.
02 · Discussion by the Hon’ble Court
The majority linked the shareholder’s statutory credit and the fiction that company-paid income tax on dividends was paid by the shareholder to the deduction-at-payment language excluding that income from advance tax. Sarkar and Raghubar Dayal JJ read section 18A as requiring actual source deduction under section 18 and would have upheld inclusion and interest.
Source: Primary judgment: reasoning
03 · Judicial decision
By majority, dividend income was outside the advance-tax computation under the historical provisions and the penal interest could not be sustained.
Source: Primary judgment: holdings
04 · Outcome / in whose favour
Assessee appeal allowed with costs by majority.
05 · AKHB REVIEW POINT
AKHB analysis: this result turns on the repealed 1922 Act’s dividend-tax fiction and divided reasoning. It should not be transposed to modern advance-tax or dividend rules without a fresh statutory analysis.
Source & verification
Download original judgment / order · Open cited source rendition
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Statutory scope
Historical statutory provisions are described as they appeared in the report. Verify the current enactment, amendments and later judicial treatment before reliance.
Later treatment
Source checked 2026-10-12. No comprehensive later-treatment or present-law clearance is represented. The note reports the historical statutory text and result in this primary report only.
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AI disclosure & professional disclaimer
This AKHB research note was prepared with AI assistance from the identified primary report and has not been represented as independently human-reviewed.
General legal and tax research only; not legal or tax advice. Verify the complete judgment, governing statutory version and subsequent judicial treatment before reliance. The AKHB REVIEW POINT is editorial analysis, not the Court's holding, and no current-law clearance is claimed.