MESSRS. HOWRAH TRADING CO., LTD, vs THE COMMISSIONER OF INCOME-TAX, CALCUTTA

The Supreme Court held that under Section 16(2) and Section 18(5) of the Indian Income-tax Act, 1922, an assessee who acquired shares through 'blank transfers' without registration is not entitled to grossing up of dividend income or credit for tax deducted at source. The Court clarified that only shareholders whose names are registered are entitled to such benefits, emphasizing that the terms 'member' and 'shareholder' are interchangeable under the Indian Companies Act, 1913. The appeal was dismissed, affirming the lower court's ruling.