Dividend tax refund depends on inclusion in return and proof of receipt; unsupported claims fail.

A shareholder's claim for refund of tax on dividends under the Indian Income-tax Act, 1922 depends on the dividend being included in the shareholder's total income, because the statutory credit mechanism under section 49B operates only when that condition is met. A dividend is treated as income when paid, credited or distributed, and the right to refund under section 48 does not arise merely from a dividend warrant or company certificate. As the assessee neither included the dividend in the return nor proved actual receipt of the dividend, the refund claim failed.

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Issues: Whether the assessee was entitled to refund of tax in respect of the dividends said to have been received from the company.

Analysis: Under the Indian Income-tax Act, 1922, a dividend is treated as the shareholder's income when it is paid, credited or distributed. Credit for tax on such dividend is available only where the dividend is included in the shareholder's total income, because the statutory fiction under section 49B treats the tax as having been paid by or on behalf of the shareholder only in that event. The right to refund under section 48 is therefore conditional and does not arise merely from production of a dividend warrant or a company certificate. On the facts, the assessee did not include the dividend in his return and failed to establish receipt of the dividend in fact.

Conclusion: The assessee was not entitled to the refund claimed.

Ratio Decidendi: A shareholder can claim refund of tax on dividend only if the dividend is shown as income in the return and the statutory conditions for deemed payment of tax are satisfied; absent such inclusion and proof, the refund claim fails.

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