Navnit Lal C. Javeri vs K.K. Sen, Appellate Assistant Commissioner Of Income Tax

Whether Section 12(1B) read with Section 2(6A)(e) of the Indian Income Tax Act, 1922, which deems loans/advances by closely-held companies to shareholders as taxable dividends, is constitutionally valid under Entry 82 of List I and does not violate Article 19(1)(f) and (g) of the Constitution --- Held Yes, the provisions are constitutionally valid as they fall within Parliament's legislative competence to prevent tax evasion and the artificial inclusion of such payments as 'income' is permissible under a liberal interpretation of the term.