Commissioner of Income-tax, Gujarat Vs. Vadilal Lallubhai - Court Judgment

Excerpt:
- [k.n. wanchoo, c.j.,; g.k. mitter,; k.s. hegde,; r.s. bachawat and; v. ramaswam, jj.] under s.10(1) of the central provinces and berar sales tax act 1947 every dealer required so to do by the commissioner by notice, and every registered dealer, shall furnish such returns by such dates and so such authority as may be prescribed, and r.19 of the rules framed under the act provides that every registered dealer should furnish quarterly returns accompanied by a treasury challan in proof of payment of the tax payable. if the registered dealer does not so furnish his return, the commissioner may, after giving the dealer a reasonable opportunity assess him to the best of his judgment (4)(a). under s.11(4) (a). rule 32 prescribes that ordinarily not less than 30 days notice should be given to an assessee for submitting his explanation before action is taken under s.11(4)(a). in 1953, s.11a was added to the act. under s.11a(1) if in consequence of any information which has come into his possession, the other commissioner is satisfied that any turnover of a dealer has escaped assessment, the commissioner may, within three calendar years from the expiry of such period, after giving the dealer a reasonable opportunity of being heard, proceed to re-assess the tax payable on any such turnover and also direct the dealer to pay a penalty. in 1959, s.11a(3) was added by which, nothing in s.11a(1) shall apply to any proceeding including any notice under s.11, that is, the period of limitation of 3 years mentioned in s.11a(1) shall not apply to a proceeding under s.11(4)(a) on best judgment basis. the appellants were registered dealers. their assessment year was from 1st november to 31st october. they submitted their quarterly returns upto 30th april 1952. since no returns were submitted thereafter, on 13th september 1955, the assessing authority issued a notice with respect to the period 1st january 1953 to 31st december 1953 calling upon them to show cause why action should not be taken against them under s.11(4) (a). a similar notice was issued on 27th october 1955 for the period 1st january 1954 to 31st december 1954, and on 7th july 1956, for the period 1st january 1955 to 31st december 1955. the appellants repeatedly took time for submitting their explanation. in 1958, fresh notices were issued for l/p(n) 7sci-(3)(a) the calendar years1952 to 1955 and the appellants raised the objection, for the first time, that their assessment year was not the calendar year, but 1st november to 31st october. in view of that objection, the first respondent issued another set of notices on 8th july 1959 for the periods 1st may 1952 to 31st october 1952, 1st november 1952 to 31st october 1953, 1st november 1953 to 31st october 1954 and 1st november 1954 to 31st october 1955 respectively. the appellants contended that those notices were barred by the 3-year period of limitation under s.11a(1), but the assessing authority assessed the appellants on best judgment basis under s. 11 (4) (a). the appellants thereupon filed writ petitions in the high court challenging the validity of the notices and the order of assessment, but the petitions were dismissed. in appeals to this court, the appellant contended that: (1) section 11(4), (a) read with s.11a(3) contravenes art. 14 of the constitution, because, a registered dealer who had failed to submit his return could be proceeded against either under s.11(4)(a) or s.11a(1), but, whereas s.11a(1) provides a 3-year period of limitation, a proceeding under s. 11(4)(a) could be initiated at any time in view of s.11a(3); (2) the notices of 1959 were barred by time; and (3) the notices of 1955 and 1956 were not valid, because, (a) the issue of one notice for several quarters was contrary to law, (b) that portion of the printed notice which said that the appellants had failed to furnish the return as required by a notice in that behalf served on them under s.10(1) did not apply to the appellants as no notice under s.10(1) had been given to them, (c) the assessment year mentioned in the notice was the calendar year which was not the assessment year of the appellants, and (d) though r. 32 provides that ordinarily not less than 30 days notice should be given to the assessee for submitting his explanation, the first notice gave to the appellants only 9 days time. held: (per wanchoo c. j., mitter and hegde, jj.) (1) section 11(4) (a) is void as it is violative of art. 14. the expression 'dealer' in s.11a(1) includes both registered and unregistered dealers, and it cannot be contended that dealers are classified into registered and unregistered dealers, the former coming under s.11(4)(a) and the latter under s.11a(1). to be a valid classification, it must not only be founded on an intelligible differential which distinguishes persons and things that are grouped together from others left out of the group, but that differentia must have a reasonable relation to the object sought to be achieved. in the present case, both s.11(4)(a) and s. 11a(1) are concerned with taxing escaped assessments, and judged from this object sought to be achieved by the act, the classification of dealers into registered and unregistered dealers is not reasonable. therefore, even registered dealers are covered by s. 11a(1). as the 'information' contemplated by s.11a(1) need not be from outside sources but could be gathered by the assessing authority from his own records, his knowledge of the facts that the appellants had not submitted quarterly returns and treasury challans and that they were notassessed to tax with respect to the turnovers in question constituted 'information' to the assessing authority from which he could be satisfied that the turnovers had escaped assessment. it would thus be open to the assessing authority to proceed against the appellants either under s.11(4)(a) or s.11a(1). but as they were proceeded against under s. 11(4)(a), they could not get the benefit of the limitation prescribed under s. 11a(1). it follows that s. 11(4)(a) has become a discriminatory provision in view of s. 11a(3), [672 b; 674 d-e; 675 h; 676 a-g]. ghanshyam das v. regional assistant commissioner of sales tax, nagpur [1964] 4 s.c.r. 436 andsuraj mall mohta & co. v. a, v. visvanatha sastri & anr. [1955] 1 s.c.r. 448, followed. maharaj kumar kamal singh v. commissioner of income-tax, bihar & orissa [1959] supp. 1 s.c.r. 10, commissioner of incometax, bombay city v. m/s. narsee nagsee & co. bombay, [1960] 3 s.c.r. 988. salem provident fund society ltd. v. c. i, t. madras, 42 i.t.r. 547 and united mercantile co. ltd. v. commissioner of income-tax, kerala, 64 i.t.r. 218 referred to. (2) but s.11(4)(a) is severable from the rest of the act and its severance does not affect the implementation of the other provisions of the act. therefore, the validity of the notices should be tested under s.11a(1). so tested, the notices of 1959 are all barred by the 3-year period of limitation. [676 g-h]. (3) since there was no valid notice for the period 1st may 1952 to 31st october 1952, there could be no assessment in respect of that period. as regards the quarter 1st november 1952 to 31st january 1953 also, there was no valid notice. the notice issued on 13th september 1955, no doubt refers to the period 1st january 1953 to 31st january 1953, but that is only a part of the quarter. as a quarter is a unit in itself and there should be a notice for the entire quarter, the proceeding in respect of the quarter from 1st november 1952 to 31st january 1953 is also barred by limitation [677 e-f]. but the notices issued in 1955 and 1956 are valid notices in so far as they relate to the period 1st february 1953 to 31st october 1955. any irregularity in the issue of the notices does not vitiate the proceeding, because, the liability to pay tax is founded on the charging sections. [680 b-c]. chatturam & ors. v. c.i.t. bihar, [1947] f.c.r. 116; 15 i.t.r. 302, applied. further, (a) the issue of one notice for several quarters is not contrary to law. [678 e]. state of orissa and anr. v. m/s. chakobhai chelabhai & co. [1961] 1 s.c.r. 719, followed. (b) the assessing authority, by mistake, had failed to strike out the portion in the printed form which was inapplicable to the appellants who were registered dealers and on whom no notice need be served to furnish a return. but this circumstance could not have prejudiced the appellants and such a mistake does not vitiate the notice. [678 h]. chakobhai chelabhai's case, [1961] 1 s.c.r. 719, followed. (c) the mistake as regards the assessment year in the notices does not render the notices invalid. the assesses deliberately kept silent and when they felt that the period of limitation prescribed by s. 11a had expired, brought the fact to the notice of the authority. the assesses were not prejudiced and could not be permitted to take advantage of such a mistake. [679 g-h]. (d) rule 32 prescribes that ordinarily 30 days' notice should be given. therefore, the period is not mandatory. all that ss.11(4) and 11a require is that an assessee should be given a reasonable opportunity before he is proceeded against. since, in the present a case, the appellants appeared before the assessing authority and did not object to the validity of the notices but asked for sub-mitting their explanation, and as the time asked for was given, the appellants had a reasonable opportunity, for submitting their explanation. [679 d-g]. (per bachawat and ramaswami jj.) (1) section 11(4) is not violative of art. 14. construing ss.11(4)(a) and 11a(1) together it must be held that cases falling within s.11(4)(a) are excluded from the purview of s.11a(1). section 11(4)(a) specially provides for the initiation of proceedings against a registered dealer. having made this special provision, the legislature must be taken to have intended that the sales tax authorities must proceed against. a registered dealer under s.11(4)(a) and not under s.11a(1). [683 c-b]. the classification and differential treatment of registered and unregistered dealers are based on substantial difference having a reasonable relation to the object of the act. the legislature did not prescribe a period of limitation for a proceeding initiated under s. 11(4)(a) against a registered dealer, because, (i) the registered dealer is under a statutory obligation to file a return, (ii) no penalty is leviable under s.11(4) and (iii) the registered dealer is given many advantages under the act which are denied to an unregistered dealer. therefore, the bar of limitation in the case of an unregistered dealer and the absence of such a bar in the case of a registered dealer cannot be regarded as unjust or discriminatory.[684 b, g-h]. ghanshyam das v. regional assistant commissioner of sales tax nagpur, [1964]4 s.c.r. 436,maharaj kumar kamal sing v. commissioner of income-tax, bihar & orissa, [1959] supp. 1 s.c.r. 10 and commissioner of income-tax v. narsee nagsee & co. [1960] 3 s.c.r. 988, explained. (2) section 11a(3) expressly provides that nothing in s. 11 a(1) shall apply to any proceeding including any notice under s. 11 and the section is retrospective. it follows that the period of limitation provided by s.11a(1) cannot be applied to a proceeding or notice under s. 11(4). consequently, the impugned notices of 1959, issued under s.11(4) are not barred by limitation and are not invalid [682 h; 683 a]. ghanshyam das's case, [1964] 4 s.c.r. 436, referred to (3) even the notices issued in 1955 and 1956 initiated proceedings validly under s. 11(4) for the period from 1st february 1953 to 31st october 1955, as the irregularities in the notices did not invalidate them. [685 b-c]. - the relevant assessment year is 1958-59 the accounting year being the year ending on march 31, 1958. 3. the assessee belongs to the well-known family of vadilal lallubhai mehta of ahmedabad. the assessee's appeal to the income-tax appellate tribunal was unsuccessful. (2) if it appears to the income-tax officer by reference to all the circumstances in relation to the securities of any such person (including circumstances with respect to sales, purchases, dealings, contracts, arrangements, transfers, or any other transactions relating to such securities) that such person has thereby avoided or would avoid more than ten per cent of the amount of the income-tax or super-tax for any year which would have been payable in his case in respect of the income from those securities if the income had been deemed to accrue from day to day and bad been apportioned accordingly, and the income so deemed to have been apportioned to him had been treated as part of his total income from all sources for the purposes of income-tax or super-tax, then those securities shall be deemed to be securities to which sub-section (3) applies. provided that this section shall not apply if such person proves to the satisfaction of the income-tax officer that the avoidance of income-tax or super-tax was exceptional and not systematic and that there was not in his case in any of the three preceding years any such avoidance of income-tax or super-tax or that the provisions of section 44-e have been applied in his case in respect of such income. it speaks of 'the amount of the income-tax or super-tax for any year which would have been payable in his case in respect of the income from those securities if the income had been deemed to accrue from day to day and bad been apportioned accordingly. 13. it is established on high authorities that the subject is not to be taxed unless the charging provision clearly imposes the obligation-see commr. that section was recommended by the select committee consisting of very eminent lawyers. if the individual can prove that the avoidance was exceptional and not systematic and that there was no such avoidance in the following three years, he can avoid liability under this provision. 20. in the result these appeals fail and they are dismissed with costs.k.s. hegde, j.1. the principal question of law arising in these appeals by certificate is whether on the facts and in the circumstances of each of these cases the department was right in applying section 44-f read with section 2(6-a)(c) of the indian income-tax act, 1922 (to be hereinafter referred to as the act). the income-tax officer, the appellate assistant commissioner and the income-tax appellate tribunal answered that question in favour of the department but the high court answered the same in favour of the assessee. as we are in agreement with the conclusion reached by the high court, we do not think it necessary to examine the other questions arising in these appeals.2. for deciding the said question of law it is sufficient if we take up the facts of any one of these cases. for the sake of convenience we shall set out the facts in civil appeal no. 2348 of 1968. the assessee in that case is vadilal lallubhai. he is assessed as an individual. the relevant assessment year is 1958-59 the accounting year being the year ending on march 31, 1958.3. the assessee belongs to the well-known family of vadilal lallubhai mehta of ahmedabad. the members of this family (who for the sake of convenience will hereinafter be referred to as the 'mehta group') owned shares in and controlled several companies including certain managing agency companies. those managing agency companies were private ltd. companies. the managed companies were also companies in which the members of the 'mehta group' had controlling interest. this group had also selling agency rights in the companies which they were managing. on the coming into force of the companies act, 1956, the managing agency companies gave up their managing agency rights in order to safeguard their selling agency rights. thereafter the assessee sold his share holdings to the employees of some 'mehta group' companies or the relations of such employees. in addition he sold some shares to one of the family trusts. a few days after the sales in question, those managing agency companies went into voluntary liquidation. consequently the assets of those companies were distributed among the shareholders who were borne on the registers of the companies as on the dates of liquidation. these shareholders included those persons who had newly purchased the shares. one of the new shareholders as mentioned earlier was a charitable trust which was not liable to pay any tax. the remaining shareholders were either not liable to pay any tax or were liable to pay tax at a lower rate than the assessee would have had to pay had he received the amount distributed by the liquidators.4. the income-tax officer brought to tax a portion of the assets distributed on liquidation by applying section 44-f read with section 2(6-a)(c) of the act. the appellate assistant commissioner agreed with this view. the assessee's appeal to the income-tax appellate tribunal was unsuccessful. thereafter at the instance of the assessee certain questions were referred to the high court for its opinion. various contentions were advanced before the high court on behalf of the assessee. we do not think it necessary to refer to those contentions as in our view the high court was right in taking the view that to the facts and circumstances of the case, section 44-f read with section 2(6-a)(c) was inapplicable.5. it was contended on behalf of the revenue that the distribution of the assets of the various managing agency companies on liquidation is 'dividend' within the meaning of section 2(6-a)(c) and consequently as 'income' as defined in section 2(6-c). further the assessee sold his shares with a view to avoid income-tax and super-tax and consequently the assets distributed which would have fallen to his share had he not sold his share are liable to be brought to tax under the provisions of section 44-f of the act, on the other hand, it was contended on behalf of the assessee that the definitions contained in section 2 are only to be applied 'unless there is anything repugnant in the subject or context'. the definition of 'dividend' given in section 2(6-a)(c) is repugnant to the subject dealt with under section 44-f and consequently the distribution of the assets on liquidation of the several managing agencies concerns cannot be considered as 'income' within the meaning of section 44-f. it was urged that section 44-f concerns itself with the income from securities or shares which are of a periodical nature but which an assessee may seek to convert into a capital receipt by adopting certain devices. the provisions therein do not deal with the compensation received for the very destruction of the income-yielding assets viz. the securities or shares. we shall now consider which one of these two contentions is acceptable. but before doing so it will be convenient to make reference to the relevant provisions in the act.6. section 2 the definition section, starts by saying that the definitions given therein apply 'unless there is anything repugnant in the subject or context'. hence if the definition of 'dividend' found in. section 2(6-a)(c) is either repugnant to the subject or context with which we are dealing that definition will not be applicable. section 2(6-a) gives an inclusive definition of 'dividend'. in this case we ere concerned with section 2(6-a)(c) which reads:any distribution made to the share-holders of a company on its liquidation, to the extent to which the distribution is attributable to the accumulated profits of the company immediately before its liquidation whether capitalised or not. 7. section 2(6-c) gives an inclusive definition of 'income'. dividend is included therein. hence if a receipt can be considered as a 'dividend' it has to be considered as an 'income' under section 2(6-c). this takes us to section 44-f, which reads:(1) any person upon whom notice is served by the income-tax officer requiring him to furnish a statement of particulars relating to any securities in which at any time during the period specified in the notice he has had any beneficial interest and in respect of which within such period either no income was received by him or the income received by him was less than the sum to which the income would have amounted if the income from such securities had accrued from day to day and been apportioned accordingly shall whether an assessment to income-tax or super-tax in respect of his total income has or has not been made for the relevant year or years of assessment, furnish such a statement and such particulars in the form and within the time not being less than twenty-eight days) required by the notice.(2) if it appears to the income-tax officer by reference to all the circumstances in relation to the securities of any such person (including circumstances with respect to sales, purchases, dealings, contracts, arrangements, transfers, or any other transactions relating to such securities) that such person has thereby avoided or would avoid more than ten per cent of the amount of the income-tax or super-tax for any year which would have been payable in his case in respect of the income from those securities if the income had been deemed to accrue from day to day and bad been apportioned accordingly, and the income so deemed to have been apportioned to him had been treated as part of his total income from all sources for the purposes of income-tax or super-tax, then those securities shall be deemed to be securities to which sub-section (3) applies.(3) for the proposes of assessment to income-tax or super-tax in the case of any such person the income from any securities to which this sub-section applies shall be deemed to accrue from day to day and in the case of the sale or transfer of any such securities by or to him shall be deemed to have been receive ed as and when it is deemed to have accrued.provided that this section shall not apply if such person proves to the satisfaction of the income-tax officer that the avoidance of income-tax or super-tax was exceptional and not systematic and that there was not in his case in any of the three preceding years any such avoidance of income-tax or super-tax or that the provisions of section 44-e have been applied in his case in respect of such income.(4) x x x x x (5) x x x x x(6) for the purpose of this section the expression 'securities' includes stocks and shares.8. from a reading of sub-sections(1) to (3) of section 44-f, it is clear that the income referred to therein should arise from shares or securities. further it must be a periodical income which is capable of being apportioned on the basis that it is deemed to have accrued from day to day. section 44-f (1) empowers the income-tax officer to serve a notice on any person 'requiring him to furnish a statement of particulars relating to any securities in which at any time during the period specified in the notice he has had any beneficial interest and in respect of which, within such period either no income was received by him or the income received by him was less than the sum to which the income would have amounted if. the income from such securities had accrued from day to day and had been apportioned accordingly.... 9. the power conferred on the income-tax officer under this provision is not. confined to any stipulated period.10. now turning to sub-section (2) of section 44-f. it speaks of ''the amount of the income-tax or super-tax for any year which would have been payable in his case in respect of the income from those securities if the income had been deemed to accrue from day to day and bad been apportioned accordingly....11. again sub-section (3) of section 44-f speaks of 'the income from any securities to which this sub-section applies shall be deemed to accrue from day to day, and in the case of the sale or transfer of any such securities by or to him shall be deemed to have been received as and when it is deemed to have accrued....12. it as clear from what we have said earlier that section 44-f concerns itself with income arising from securities or shares during a period of time. when a company goes into liquidation, the share-scrips are no more income yielding assets. they are mere pieces of paper. no income arises from those shares thereafter. what the shareholder gets on liquidation is not any income from shares but a share of the assets of the quondam company. such a receipt is incapable of being deemed to accrue from day to day. in the case of interest on securities or dividends on shares. they are paid at certain intervals. hence it is possible to deem them as having accrued from day to day but in the case of distribution of assets of a company in liquidation, it is not possible to deem the same to have accrued from day to day. we have to bear in mind that some of the 'dividends' mentioned in section 2(6-a) are only deemed dividends. they are not real dividends. by a legal fiction. ;hey are deemed as dividends. this court held in commr. of income-tax. andhra pradesh v. c.p. sarathy mudaliar : [1972]83itr170(sc) that the definition of 'dividend' contained in section 2(6-a)(c) is an artificial definition of 'dividend'. it does not take in dividend actually declared or received. the dividend taken note of by that provision is a deemed dividend and not a real dividend. the same would be the position in the case of the 'dividend' mentioned in section 2(6-a)(c). as held by this court in commr. of income-tax bombay city 1 v. amarchand n. shroff. : [1963]48itr59(sc) legal fictions are only for a definite purpose and they are limited to the purpose for which they are created and should not be extended beyond their legitimate field.13. it is established on high authorities that the subject is not to be taxed unless the charging provision clearly imposes the obligation-see commr. of income-tax, madras v. ajax products ltd. : [1965]55itr741(sc) . as is often said that in interpreting a taxing provision one has merely to look to the words of the provision. the language employed in section 44-f cannot be said to be plain enough to bring to tax the receipts of the character with which we are concerned in these appeals.14. to accept the contention of the revenue we have to adopt threefold assumption. firstly the fictional dividend contemplated by section 2(6-a)(c) is an 'income' within the meaning of section 44-f. secondly we must assume that that dividend is capable of being deemed to accrue day to day and lastly we must assume that the day to day distribution contemplated in section 44-f commences from the commencement of the relevant accounting year and ends with the distribution of the assets as contended on behalf of the department. to do so we have to read into the section many more words than it contains at present which is wholly impermissible in construing any provision much less a taxing provision. in the case of deemed dividend under section 2(6-a)(c), the assets distributed will be considered as income in the account year in which if is distributed but that conception would be inapplicable in oases coming under section 44-f. a company may go into liquidation long after the accounting year ends. what period the income-tax officer should take into consideration for applying the fiction that 'the income had deemed to accrue from day to day?' the scheme of section 2(6-a)(c) is incompatible with the scheme of section 44-f. the two provisions are intended to meet totally different situations. the former provision cannot be dovetailed into the latter.15. in order to find out the legislative intent. we have to find out what was the mischief that the legislature wanted to remedy. the act was extensively amended in the year 1939. section 44-f was not in the draft bill. that section was recommended by the select committee consisting of very eminent lawyers. it will not be inappropriate to find out the reasons which persuaded the select committee to recommend the inclusion of section 44-f. if the section is considered as ambiguous-see commr, of income-tax. madhya pradesh and bhopal v. sodra devi. : [1957]32itr615(sc) . in recommending the inclusion of section 44-f, this is what the select committee observed:the new sections 44-e and 44-f are designed to prevent avoidance of tax lay what are known as 'bond-washing' transactions, involving the manipulation of securities so that the securities will pass temporarily in the legal ownership of some second person who is either not liable at all or liable in a lesser degree to tax. under such conditions that the interest on the securities is the income of this second person. a common form of the process is the sale of securities cum interest with a simultaneous contract to purchase them ex-interest. where foreign securities are concerned this second person may be a foreigner resident abroad entitled to claim exemption from the tax on the interest. more often a financial concern in india is utilised whose computation of profits includes the results of realising securities, so that the concern can profitably offer 'bond-washing' facilities to the owner of securities bearing fixed interest where the owner himself is not liable to taxation on the realisation of the securities.16. section 44-f of the act. immaterial changes apart, is a reproduction of section 33 of the english finance act, 1927 which was subsequently replaced by section 237 of the english income-tax act, 1952. dealing with that section this is what is observed in the law of income tax. surtax and profits tax by wheats croft at page 1669 (paragraph 1-1358):we now come to the more difficult problem which arises when a taxpayer sells, for a capital sum. securities which are about to pay interest and the purchaser acquires the right both to the securities and the interest.it is the custom on british stock ex-changes to notify in advance the dates in respect of each security before which a buyer of that security will be entitled to the next income payment. up to that date the security is sold 'cum dividend'; after that date the security is sold 'ex dividend' and the next income payment when received after the sale, will remain the property of the seller. apart from the general market fluctuations the price will gradually rise up to the day when the security goes 'ex div.' it will then normally fall sharply by a sum approximately equal to the anticipated income payment less tax at standard rate, as the average investor values the income at its net amount. if the amount is at a fixed rate, such as on government stock, the likely fall for this reason can foe calculated with considerable accuracy in advance.a surtax payer who pays more than the standard rate of tax, can thus find it profitable to sell his securities just before they go 'ex div.' as he will receive as capital the equivalent of the net dividend, instead of receiving a dividend subject to tax in his hands at a higher rate than that deducted from the dividend.to deal with taxpayers who used this, and similar devices on a substantial scale it was provided by the finance act, 1927. that if it appears to the revenue by reference to all the circumstances in relation to the assets of any individual (including circumstances with respect to sales purchases dealings, contracts, arrangements, transfers or any other transactions relating to such assets) that the individual has thereby avoided or would avoid more than 10 per cent. of the amount of surtax for any year which would have been payable in his case if the income from those assets had been deemed to accrue from day to day and had been apportioned to him as part of his total income then such income is to be so apportioned to him for the purpose of computing ms surtax. if the individual can prove that the avoidance was exceptional and not systematic and that there was no such avoidance in the following three years, he can avoid liability under this provision. extensive powers are given to the revenue to obtain information for the purpose of this provision.17. the marginal note for section 44-f reads 'avoidance of tax by sales cum dividend'. this marginal note also gives an indication as to what exactly was the mischief that was intended to be remedied. the legislature was evidently trying to circumvent the devices adopted by some of the assessees to convert their revenue receipts into capital receipts. the marginal note also throws light on the intention of the legislature.18. from what has been stated above. it is clear that the deemed dividend contemplated by section 2(6-a)(c) cannot be considered as 'income' under section 44-f.19. for the reasons mentioned) above we agree with the high court that section 44-f is inapplicable to the facts of the assessee's case. this question is common to all the abovementioned appeals. hence we need not go into the other subsidiary questions arising for decision in any of these appeals.20. in the result these appeals fail and they are dismissed with costs. one hearing fee.