https://www.taxtmi.com/caselaws?id=274723 Bonus shares issued out of accumulated profits are not, by that fact alone, dividend income where no company assets are released. The decisive issue is the character of the bonus shares in the recipient's hands after allotment. A dealer in shares may hold some shares as stock-in-trade and others as capital assets, and there is no presumption that every share received must be trading stock. Because bonus shares are received involuntarily, the recipient's subsequent treatment of them is the best evidence of intention. The accretion and nexus theories were rejected as inconsistent with the distinction between stock-in-trade and capital assets and with the absence of proof of trading intent. en-us Fri, 17 Jan 1964 00:00:00 +0530 Thu, 30 Aug 2018 16:21:40 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=274723 Bonus shares issued out of accumulated profits are not, by that fact alone, dividend income where no company assets are released. The decisive issue is the character of the bonus shares in the recipient's hands after allotment. A dealer in shares may hold some shares as stock-in-trade and others as capital assets, and there is no presumption that every share received must be trading stock. Because bonus shares are received involuntarily, the recipient's subsequent treatment of them is the best evidence of intention. The accretion and nexus theories were rejected as inconsistent with the distinction between stock-in-trade and capital assets and with the absence of proof of trading intent. Case-Laws Income Tax Fri, 17 Jan 1964 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=274723