{"id":110306,"date":"1998-03-31T00:00:00","date_gmt":"1998-03-30T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/commissioner-of-income-tax-vs-sawhany-trading-co-ltd-on-31-march-1998"},"modified":"2017-08-31T20:55:27","modified_gmt":"2017-08-31T15:25:27","slug":"commissioner-of-income-tax-vs-sawhany-trading-co-ltd-on-31-march-1998","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/commissioner-of-income-tax-vs-sawhany-trading-co-ltd-on-31-march-1998","title":{"rendered":"Commissioner Of Income-Tax vs Sawhany Trading Co. Ltd. on 31 March, 1998"},"content":{"rendered":"<div class=\"docsource_main\">Madras High Court<\/div>\n<div class=\"doc_title\">Commissioner Of Income-Tax vs Sawhany Trading Co. Ltd. on 31 March, 1998<\/div>\n<div class=\"doc_citations\">Equivalent citations: 1999 240 ITR 242 Mad<\/div>\n<div class=\"doc_author\">Author: R J Babu<\/div>\n<div class=\"doc_bench\">Bench: R J Babu, N Balasubramanian<\/div>\n<\/p>\n<pre><\/pre>\n<p>JUDGMENT<\/p>\n<p>R. Jayasimha Babu, J.<\/p>\n<p> 1. The question referred to us at the instance of the Revenue arising out of the respondent&#8217;s assessment for the assessment year 1975-76 is as to whether, on the facts and in the circumstances of the case, the Tribunal was right in holding and have valid materials to hold that the assessee was not liable to additional income-tax under Section 104 of the Income-tax Act, 1961, for the assessment year 1975-76.\n<\/p>\n<p> 2. The assessee admittedly had distributable income of Rs. 37,330 and was required to distribute 60 per cent, of the sum at Rs. 22,398 for that assessment year. The assessee, however, could not make the distribution as the audit of the accounts was completed only on June 5, 1976, and the audited accounts were approved and dividend declared at the annual general body meeting held on September 20, 1976. After the declaration was made at the general body meeting, the dividend was in fact, distributed and the amounts so distributed were in excess of 60 per cent, of the distributable income.\n<\/p>\n<p> 3. It was the contention of the assessee before the Tribunal that the Revenue had not suffered any prejudice by reason of such belated distribution of the dividend. The Tribunal, on a question of fact, has held as there is no detriment to the Government because of the postponed declaration of the dividend for the previous year. Nothing has been placed before us to show that the conclusion of the Tribunal was in any way erroneous.\n<\/p>\n<p> 4. Sub-section (2) of Section 104 of the Income-tax Act disentitles the Income-tax Officer from making an order under Sub-section (1) of Section 104 of the Act if he is satisfied, inter alia, that the payment of a dividend or a larger dividend, than that declared within a period of 12 months referred to in Sub-section (1) of Section 104 of the Act would not have<\/p>\n<p>resulted in any benefit to the Revenue. The powers exercisable by the Income-tax Officer and also the orders that could be made, can also be made by the Tribunal in appeal. The Appellate Tribunal has found that the Government would not have secured any benefit if the dividend had in fact, been distributed within a period of 12 months referred to in Sub-section (1). In view of the finding, the Income-tax Officer could not have made an order under Sub-section (1) of Section 104 of the Act and that is what the Tribunal has held and in our view, rightly. Our answer to the question that has been referred to us is, therefore, in the affirmative, in favour of the assessee and against the Revenue. As the assessee is unrepresented, there will be no order as to costs.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Madras High Court Commissioner Of Income-Tax vs Sawhany Trading Co. Ltd. on 31 March, 1998 Equivalent citations: 1999 240 ITR 242 Mad Author: R J Babu Bench: R J Babu, N Balasubramanian JUDGMENT R. Jayasimha Babu, J. 1. The question referred to us at the instance of the Revenue arising out of the respondent&#8217;s assessment [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,13],"tags":[],"class_list":["post-110306","post","type-post","status-publish","format-standard","hentry","category-high-court","category-madras-high-court"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Commissioner Of Income-Tax vs Sawhany Trading Co. Ltd. on 31 March, 1998 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/commissioner-of-income-tax-vs-sawhany-trading-co-ltd-on-31-march-1998\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Commissioner Of Income-Tax vs Sawhany Trading Co. Ltd. on 31 March, 1998 - Free Judgements of Supreme Court &amp; High Court | Legal India\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.legalindia.com\/judgments\/commissioner-of-income-tax-vs-sawhany-trading-co-ltd-on-31-march-1998\" \/>\n<meta property=\"og:site_name\" content=\"Free Judgements of Supreme Court &amp; High Court | Legal India\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/LegalindiaCom\/\" \/>\n<meta property=\"article:published_time\" content=\"1998-03-30T18:30:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2017-08-31T15:25:27+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/i0.wp.com\/www.legalindia.com\/judgments\/wp-content\/uploads\/sites\/5\/2025\/09\/legal-india-icon.jpg?fit=512%2C512&ssl=1\" \/>\n\t<meta property=\"og:image:width\" content=\"512\" \/>\n\t<meta property=\"og:image:height\" content=\"512\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Legal India Admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@legaliadmin\" \/>\n<meta name=\"twitter:site\" content=\"@Legal_india\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Legal India Admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/commissioner-of-income-tax-vs-sawhany-trading-co-ltd-on-31-march-1998#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/commissioner-of-income-tax-vs-sawhany-trading-co-ltd-on-31-march-1998\"},\"author\":{\"name\":\"Legal India Admin\",\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#\\\/schema\\\/person\\\/0bfdffe9059fb8bb24a86d094609c5ea\"},\"headline\":\"Commissioner Of Income-Tax vs Sawhany Trading Co. Ltd. on 31 March, 1998\",\"datePublished\":\"1998-03-30T18:30:00+00:00\",\"dateModified\":\"2017-08-31T15:25:27+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/commissioner-of-income-tax-vs-sawhany-trading-co-ltd-on-31-march-1998\"},\"wordCount\":470,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#organization\"},\"articleSection\":[\"High Court\",\"Madras High Court\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/commissioner-of-income-tax-vs-sawhany-trading-co-ltd-on-31-march-1998#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/commissioner-of-income-tax-vs-sawhany-trading-co-ltd-on-31-march-1998\",\"url\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/commissioner-of-income-tax-vs-sawhany-trading-co-ltd-on-31-march-1998\",\"name\":\"Commissioner Of Income-Tax vs Sawhany Trading Co. Ltd. on 31 March, 1998 - Free Judgements of Supreme Court &amp; High Court | Legal India\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#website\"},\"datePublished\":\"1998-03-30T18:30:00+00:00\",\"dateModified\":\"2017-08-31T15:25:27+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/commissioner-of-income-tax-vs-sawhany-trading-co-ltd-on-31-march-1998#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/commissioner-of-income-tax-vs-sawhany-trading-co-ltd-on-31-march-1998\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/commissioner-of-income-tax-vs-sawhany-trading-co-ltd-on-31-march-1998#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Commissioner Of Income-Tax vs Sawhany Trading Co. Ltd. on 31 March, 1998\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#website\",\"url\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/\",\"name\":\"Free Judgements of Supreme Court & High Court | Legal India\",\"description\":\"Search and read the latest judgements, orders, and rulings from the Supreme Court of India and all High Courts. A comprehensive database for lawyers, advocates, and law students.\",\"publisher\":{\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#organization\"},\"alternateName\":\"Free judgements of Supreme Court & High Court of India | Legal India\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#organization\",\"name\":\"Judgements of Supreme Court & High Court | Legal India\",\"alternateName\":\"Legal India\",\"url\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#\\\/schema\\\/logo\\\/image\\\/\",\"url\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/wp-content\\\/uploads\\\/sites\\\/5\\\/2025\\\/09\\\/legal-india-icon.jpg\",\"contentUrl\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/wp-content\\\/uploads\\\/sites\\\/5\\\/2025\\\/09\\\/legal-india-icon.jpg\",\"width\":512,\"height\":512,\"caption\":\"Judgements of Supreme Court & High Court | Legal India\"},\"image\":{\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#\\\/schema\\\/logo\\\/image\\\/\"},\"sameAs\":[\"https:\\\/\\\/www.facebook.com\\\/LegalindiaCom\\\/\",\"https:\\\/\\\/x.com\\\/Legal_india\"]},{\"@type\":\"Person\",\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#\\\/schema\\\/person\\\/0bfdffe9059fb8bb24a86d094609c5ea\",\"name\":\"Legal India Admin\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/4faa9d728ed1af3b73d52225c7f12901ac726fe6f7ea0a3348a1d51f3a930987?s=96&d=mm&r=g\",\"url\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/4faa9d728ed1af3b73d52225c7f12901ac726fe6f7ea0a3348a1d51f3a930987?s=96&d=mm&r=g\",\"contentUrl\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/4faa9d728ed1af3b73d52225c7f12901ac726fe6f7ea0a3348a1d51f3a930987?s=96&d=mm&r=g\",\"caption\":\"Legal India Admin\"},\"sameAs\":[\"https:\\\/\\\/www.legalindia.com\",\"https:\\\/\\\/x.com\\\/legaliadmin\"],\"url\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/author\\\/legal-india-admin\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Commissioner Of Income-Tax vs Sawhany Trading Co. Ltd. on 31 March, 1998 - Free Judgements of Supreme Court &amp; High Court | Legal India","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.legalindia.com\/judgments\/commissioner-of-income-tax-vs-sawhany-trading-co-ltd-on-31-march-1998","og_locale":"en_US","og_type":"article","og_title":"Commissioner Of Income-Tax vs Sawhany Trading Co. Ltd. on 31 March, 1998 - Free Judgements of Supreme Court &amp; High Court | Legal India","og_url":"https:\/\/www.legalindia.com\/judgments\/commissioner-of-income-tax-vs-sawhany-trading-co-ltd-on-31-march-1998","og_site_name":"Free Judgements of Supreme Court &amp; High Court | Legal India","article_publisher":"https:\/\/www.facebook.com\/LegalindiaCom\/","article_published_time":"1998-03-30T18:30:00+00:00","article_modified_time":"2017-08-31T15:25:27+00:00","og_image":[{"width":512,"height":512,"url":"https:\/\/i0.wp.com\/www.legalindia.com\/judgments\/wp-content\/uploads\/sites\/5\/2025\/09\/legal-india-icon.jpg?fit=512%2C512&ssl=1","type":"image\/jpeg"}],"author":"Legal India Admin","twitter_card":"summary_large_image","twitter_creator":"@legaliadmin","twitter_site":"@Legal_india","twitter_misc":{"Written by":"Legal India Admin","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.legalindia.com\/judgments\/commissioner-of-income-tax-vs-sawhany-trading-co-ltd-on-31-march-1998#article","isPartOf":{"@id":"https:\/\/www.legalindia.com\/judgments\/commissioner-of-income-tax-vs-sawhany-trading-co-ltd-on-31-march-1998"},"author":{"name":"Legal India Admin","@id":"https:\/\/www.legalindia.com\/judgments\/#\/schema\/person\/0bfdffe9059fb8bb24a86d094609c5ea"},"headline":"Commissioner Of Income-Tax vs Sawhany Trading Co. Ltd. on 31 March, 1998","datePublished":"1998-03-30T18:30:00+00:00","dateModified":"2017-08-31T15:25:27+00:00","mainEntityOfPage":{"@id":"https:\/\/www.legalindia.com\/judgments\/commissioner-of-income-tax-vs-sawhany-trading-co-ltd-on-31-march-1998"},"wordCount":470,"commentCount":0,"publisher":{"@id":"https:\/\/www.legalindia.com\/judgments\/#organization"},"articleSection":["High Court","Madras High Court"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/www.legalindia.com\/judgments\/commissioner-of-income-tax-vs-sawhany-trading-co-ltd-on-31-march-1998#respond"]}]},{"@type":"WebPage","@id":"https:\/\/www.legalindia.com\/judgments\/commissioner-of-income-tax-vs-sawhany-trading-co-ltd-on-31-march-1998","url":"https:\/\/www.legalindia.com\/judgments\/commissioner-of-income-tax-vs-sawhany-trading-co-ltd-on-31-march-1998","name":"Commissioner Of Income-Tax vs Sawhany Trading Co. Ltd. on 31 March, 1998 - Free Judgements of Supreme Court &amp; High Court | Legal India","isPartOf":{"@id":"https:\/\/www.legalindia.com\/judgments\/#website"},"datePublished":"1998-03-30T18:30:00+00:00","dateModified":"2017-08-31T15:25:27+00:00","breadcrumb":{"@id":"https:\/\/www.legalindia.com\/judgments\/commissioner-of-income-tax-vs-sawhany-trading-co-ltd-on-31-march-1998#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.legalindia.com\/judgments\/commissioner-of-income-tax-vs-sawhany-trading-co-ltd-on-31-march-1998"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.legalindia.com\/judgments\/commissioner-of-income-tax-vs-sawhany-trading-co-ltd-on-31-march-1998#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.legalindia.com\/judgments\/"},{"@type":"ListItem","position":2,"name":"Commissioner Of Income-Tax vs Sawhany Trading Co. Ltd. on 31 March, 1998"}]},{"@type":"WebSite","@id":"https:\/\/www.legalindia.com\/judgments\/#website","url":"https:\/\/www.legalindia.com\/judgments\/","name":"Free Judgements of Supreme Court & High Court | Legal India","description":"Search and read the latest judgements, orders, and rulings from the Supreme Court of India and all High Courts. A comprehensive database for lawyers, advocates, and law students.","publisher":{"@id":"https:\/\/www.legalindia.com\/judgments\/#organization"},"alternateName":"Free judgements of Supreme Court & High Court of India | Legal India","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.legalindia.com\/judgments\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/www.legalindia.com\/judgments\/#organization","name":"Judgements of Supreme Court & High Court | Legal India","alternateName":"Legal India","url":"https:\/\/www.legalindia.com\/judgments\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.legalindia.com\/judgments\/#\/schema\/logo\/image\/","url":"https:\/\/www.legalindia.com\/judgments\/wp-content\/uploads\/sites\/5\/2025\/09\/legal-india-icon.jpg","contentUrl":"https:\/\/www.legalindia.com\/judgments\/wp-content\/uploads\/sites\/5\/2025\/09\/legal-india-icon.jpg","width":512,"height":512,"caption":"Judgements of Supreme Court & High Court | Legal India"},"image":{"@id":"https:\/\/www.legalindia.com\/judgments\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/LegalindiaCom\/","https:\/\/x.com\/Legal_india"]},{"@type":"Person","@id":"https:\/\/www.legalindia.com\/judgments\/#\/schema\/person\/0bfdffe9059fb8bb24a86d094609c5ea","name":"Legal India Admin","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/4faa9d728ed1af3b73d52225c7f12901ac726fe6f7ea0a3348a1d51f3a930987?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/4faa9d728ed1af3b73d52225c7f12901ac726fe6f7ea0a3348a1d51f3a930987?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/4faa9d728ed1af3b73d52225c7f12901ac726fe6f7ea0a3348a1d51f3a930987?s=96&d=mm&r=g","caption":"Legal India Admin"},"sameAs":["https:\/\/www.legalindia.com","https:\/\/x.com\/legaliadmin"],"url":"https:\/\/www.legalindia.com\/judgments\/author\/legal-india-admin"}]}},"modified_by":null,"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_likes_enabled":true,"jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/posts\/110306","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/comments?post=110306"}],"version-history":[{"count":0,"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/posts\/110306\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/media?parent=110306"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/categories?post=110306"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/tags?post=110306"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}