RAMPUR DISTILLERY AND CHEMICALS CO. LTD. vs COMMISSIONER OF INCOME-TAX, LUCKNOW

The Supreme Court held that under Section 16(2) of the Indian Income Tax Act, 1922, a declared dividend is taxable only in the year it is paid, credited, or distributed. The Court found that the dividend declared by the sugar company was unconditionally available to the assessee on January 16, 1952, and thus should be included in the assessment year 1952-53, not 1957-58. The High Court's ruling that the dividend was taxable in 1957-58 was overturned, affirming the Tribunal's decision.