Contextual reading of "previous years" governs taxability of liquidation distributions as dividend under the income-tax law.

A liquidation distribution was treated as dividend under section 2(6A)(c) of the Indian Income-tax Act, 1922 because the phrase "six previous years" was construed contextually, not in the technical sense of "previous year" in section 2(11). The provision was read to cover the six accounting years immediately preceding liquidation, which preserved the legislative purpose of assimilating distributions of accumulated profits on liquidation to dividend while limiting the charge to profits accumulated during that period. On that construction, the liquidator's distribution of accumulated profits was taxable, and the contrary argument based on section 2(11) failed.

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Issues: Whether the sum distributed by the liquidator on liquidation was taxable as dividend under section 2(6A)(c) of the Indian Income-tax Act, 1922, and whether the expression "six previous years" in that provision had to be read in the technical sense of "previous year" defined in section 2(11).

Analysis: The provision in section 2(6A)(c) was held to use the words "six previous years" in a context different from the technical definition of "previous year" in section 2(11). Reading section 2(11) into section 2(6A)(c) would make the phrase "six previous years" impossible to apply, because section 2(11) contemplates one previous year for a given assessment year, whereas section 2(6A)(c) necessarily refers to a cycle of six accounting years preceding liquidation. The object of the provision was to remove the anomaly that had existed under the law governing distributions of accumulated profits on liquidation and to assimilate such distributions to dividend, subject to the limitation that only profits accumulated during the six years preceding liquidation would be included. On that construction, the relevant period was the six accounting years immediately before liquidation, not the technical assessment-year-linked meaning urged by the appellant.

Conclusion: The amount of Rs. 26,000 was dividend within section 2(6A)(c) and was chargeable to tax; the contention based on section 2(11) failed.

Final Conclusion: The statutory definition of dividend applied to the liquidator's distribution of accumulated profits, and the appeal was dismissed.

Ratio Decidendi: Where a taxing provision uses the expression "previous years" in a context inconsistent with the technical definition of "previous year" in the Act, the expression must be construed contextually as referring to the relevant accounting years immediately preceding liquidation.

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