https://www.taxtmi.com/caselaws?id=6267 Shareholder distributions must be characterised by their nature in the hands of the recipient, not by the source or label attached to them in the company's accounts. Amounts received by a company as salamis and land acquisition compensation were capital in the company's hands, and when later distributed to shareholders they represented a share of capital beneficially belonging to them. The Supreme Court stated that describing the payment as a dividend did not change its true character. The distribution was therefore a capital receipt in the shareholders' hands and was not taxable as dividend or as income from other sources under section 2(6A) of the Indian Income-tax Act, 1922. en-us Mon, 16 Aug 1971 00:00:00 +0530 Wed, 03 Dec 2008 00:00:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=6267 Shareholder distributions must be characterised by their nature in the hands of the recipient, not by the source or label attached to them in the company's accounts. Amounts received by a company as salamis and land acquisition compensation were capital in the company's hands, and when later distributed to shareholders they represented a share of capital beneficially belonging to them. The Supreme Court stated that describing the payment as a dividend did not change its true character. The distribution was therefore a capital receipt in the shareholders' hands and was not taxable as dividend or as income from other sources under section 2(6A) of the Indian Income-tax Act, 1922. Case-Laws Income Tax Mon, 16 Aug 1971 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=6267