COMMISSIONER OF INCOME-TAX, GUJARAT vs VADILAL LALLUBHAI ETC. ETC.

The Supreme Court held that under Section 2(6A)(c) of the Income-tax Act, 1922, distributions made to shareholders during a company's liquidation can be deemed dividends, but this only applies if not repugnant to the context. The Court clarified that legal fictions are limited to their intended purpose and should not extend beyond that. It concluded that the distribution of assets upon liquidation does not constitute income under Section 44F, as such receipts cannot be deemed to have accrued from day to day. The High Court's ruling in favor of the assessee was upheld, dismissing the appeal by the Department.