HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
M/s Shri Gopal Paper Mills Co. Ltd. v. Commissioner of Income-tax, Central Calcutta
Civil Appeal No. 1669 of 1966
[1971] 1 SCR 323 ·
Finance Act, 1956: Part II, Paragraph D and provisos · Companies Act principles on issue and allotment of shares
Sources & disclosures includedDownload original judgment / order
3-judge bench; unanimous judgment delivered by K. S. Hegde, J. · J. C. Shah, J. · K. S. Hegde, J. · A. N. Grover, J.
Assessment years: 1956-57
01 · Facts of the case
A general meeting resolved on 30 December 1954 to capitalise accumulated profits and distribute fully paid bonus shares, with dividends beginning 1 January 1955. Revenue treated later implementation as issue during the next accounting year (SCR pp.323-329; PDF pp.1-7).
Source: Primary judgment: facts
02 · Discussion by the Hon’ble Court
Issue does not invariably await a certificate. Reading the resolution as a whole, capitalisation, distribution and shareholder ownership took effect on 30 December; directions to directors governed implementation and book recording, not the substantive transfer date (SCR pp.329-334; PDF pp.7-12).
Source: Primary judgment: discussion
03 · Judicial decision
The Court allowed the appeal, answered both questions for the assessee and awarded costs in both courts (SCR p.334; PDF p.12).
Source: Primary judgment: decision
04 · Outcome / in whose favour
In favour of the assessee: the bonus shares counted in paid-up capital and were not issued in the later period for rebate reduction (SCR pp.333-334; PDF pp.11-12).
Source: Primary judgment: outcome
05 · AKHB REVIEW POINT
AKHB analysis: read the whole corporate resolution to separate immediate legal effect from later certificates and records. Current company-law issuance rules and tax consequences must be verified independently (based on SCR pp.331-334; PDF pp.9-12).
Source: Primary judgment: review point
Source & verification
Download original judgment / order · Open cited source rendition
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Statutory scope
The case applies historical corporation-tax rebate provisions and company-law concepts; it does not state current dividend or capitalisation tax treatment.
Later treatment
Source checked 2026-10-11. Later judicial treatment and current statutory applicability have not been comprehensively checked; no current-law or citator clearance is represented.
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