Income-tax Act (XI of 1922)---

----S.16 (3)(a)(iii)---Assessee, an individual deriving income from dividends, transferred shares to his wife in lieu of Haqmehr---Income Tax Officer, held, was not justified in including wife's income for such shares in the income of assessee.

Mian Aziz A. Sheikh v. Commissioner of Income Tax (Investigation), Lahore PLD 1989 SC 613 fol.

Muhammad Amin Butt for Applicant. Muhammad Ilays Khan for Respondent.

Date of hearing: 9th February, 1991.

JUDGMENT

M. MAHBOOB AHMAD, C.J.-- The petitioner/assessee is an individual who inter alia derives income from dividends. For the assessment year 1963-64, the Income Tax Officer while finalizing petitioner's assessment vide his order dated 27-6-1968 included a sum of Rs.48,062 in the income of the assessee and refused to treat it as income of his wife to whom the shares were statedly transferred by him in lieu of her haqmehr.

2. Aggrieved by the above order dated 27-6-1968, the applicant filed an appeal which was dismissed by the Appellate Assistant Commissioner of Income Tax on 19-6-1969. Still feeling dissatisfied, the petitioner went in second appeal which was rejected by the learned Income-tax Appellate Tribunal vide its order dated 2-3-1971. On an application filed by the petitioner, before the learned Income Tax Appellate Tribunal it has referred the following question to this Court for answer:--

"Whether on facts and in the circumstances of the case the learned Tribunal was right in holding that the dividend of Rs. 48,062 received by the assessee's wife had been properly included in the income of the assessee under section 16(3)(a)(iii) of the Income Tax Act?

3. We have heard the learned counsel for the parties. The answer to the question formulated above need not detain us in view of the pronouncement of the Supreme Court in Mian Aziz A. Sheikh v. Commissioner of Income Tax (Investigation), Lahore reported as PLD 1989 SC 613 which is fully applicable to the present case. In terms of the above authority, the answer to the above question has to be in the negative and in favour of the assessee.

M.B.A./N-41/LQuestion answered in negative.