PUNJAB DISTILLING INDUSTRIES LTD. vs COMMISSIONER OF INCOME-TAX, PUNJAB

The Supreme Court held that the definition of 'dividend' under Section 2(6A)(d) of the Indian Income-tax Act, 1922, which includes capital receipts from the reduction of a company's capital, is valid and not ultra vires. The Court ruled that the distribution of accumulated profits, although not refunded in the accounting year ending November 30, 1954, was deemed to occur in the subsequent year relevant to the assessment year 1956-57. The judgment emphasized the need for a broad interpretation of 'income' to prevent tax evasion, affirming the findings of the Income-tax Officer and lower authorities.