COMMISSIONER OF INCOME TAX, BOMBAY vs WEST COAST PAPER MILLS LTD.

The Supreme Court held that under Section 19(4) of the Finance Act, 1959, a company is exempt from deducting tax at source for dividends declared for previous years if those dividends are paid out of profits from the current accounting year. The Court clarified that the term 'dividend' in this context does not carry its technical meaning from company law, as it would render part of Section 19(4) ineffective. The appeal by the Revenue was dismissed, affirming the High Court's ruling in favor of the assessee.