Dividend definition excludes statutory surplus payment made without any shareholder relationship or share capital basis.

Payment by the Life Insurance Corporation to the Central Government out of surplus profits was not "dividend" within section 2(22) because the statutory definition, though inclusive, still contemplates distribution to a shareholder. The Corporation had no share capital divided into shares, the Central Government was not a shareholder, and the payment arose under the special scheme of the Life Insurance Corporation Act, 1956 rather than any shareholder relationship. Accordingly, Chapter XII-D was not attracted, section 115-O did not apply, and the assessee could not be treated as in default under section 115-Q.

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Issues: Whether the payment made by the Life Insurance Corporation to the Central Government out of surplus profits was "dividend" within the meaning of section 2(22) of the Income-tax Act, 1961 so as to attract tax on distributed profits under section 115-O and default consequences under section 115-Q.

Analysis: The definition of dividend in section 2(22) is inclusive, but clauses (a) to (d) still contemplate a distribution to shareholders. The Corporation's capital was not divided into shares, and the Central Government was not a shareholder. The ordinary meaning of dividend also presupposes a payment to a shareholder proportionate to shareholding. Since the payment was made under the special scheme of the Life Insurance Corporation Act, 1956 and not in satisfaction of any shareholder relationship, it could not be treated as dividend for the purpose of Chapter XII-D.

Conclusion: The payment to the Central Government was not dividend and section 115-O did not apply; consequently, the assessee could not be treated as an assessee in default under section 115-Q.

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