WAR PROFITS TAX COMMISSIONER, MADHYA PRADESH,INDORE vs M/S. RINODRAM BALCHAND OF UJJAIN

The Supreme Court ruled that the Explanation added to Rule 3(2) of the Gwalior War Profits Tax Ordinance applies retroactively to Rule 3(1), thus excluding the dividend income from the taxable income of the assessee. The Court held that the Ordinance of 1947 indicates the Explanation was intended to be effective from the inception of the War Profits Tax Ordinance in 1944. Consequently, the High Court's decision to exclude the dividend income from taxation was upheld.