Summarize the following court judgment. ivil Appeal No. 65 of 1956. Appeal from the judgment and order dated August 31	 1954	 of the Calcutta High Court in Income tax Ref. No. 57 of 1953. N. C. Chatterjee and B. P. Maheshwari	 for the appellant. K. N. Rajagopala Sastri	 R. H. Dhebar and D. Gupta	 for the respondent. March 26. The Judgment of the Court was delivered by HIDAYATULLAH	 J. Messrs. Howrah Trading Company	 Ltd.	 Calcutta (hereinafter called the assessee) obtained on April 28	 1955	 a certificate under section 66A(2) of the Indian Income tax Act from the Calcutta High Court	 to appeal to this Court against the judgment dated August 31	 1954	 in Income tax Reference No. 57 of 1953. The Divisional Bench (Chakravarti	 C. J.	 and Lahiri	 J.) in the judgment under appeal merely followed their earlier judgment delivered the same day in Income tax Reference No. 22 of 1953	 since reported as Hindustan Investment Corporation vs Commissioner of Income tax (1). It is the latter judgment which gives the reasons for the decision. The facts of the case have been stated with sufficient fulness	 yet briefly	 in the statement of the case submitted by the Income tax Appellate Tribunal (Calcutta Bench) and may be conveniently set out in its own words: (1) 57 450 " The applicant had received sums of Rs. 3	831	 Rs. 6	606	 Rs. 7	954 and Rs. 8	304 in the four assessment years	 1944 45	 1945 46	 1946 47 and 1947 48 as income from dividends. The shares in respect of which this dividend income was received were the property of the Applicant but in the books of the various companies these stood in the names of other persons. It appears that these shares were purchased by the Applicant from other persons under a blank transfer but the transfers had not been registered with the various companies. The Applicant 's claim in these income tax proceedings was that these shares although not registered in the name of the applicant were the property of the applicant. It was further claimed that this dividend income should be grossed up under section 16(2) and credit for the tax deducted should be allowed to the Applicant under section 18(5). " The Income tax Officer did not accept this claim	 and the appeals of the assessee were rejected by the Appellate Assistant Commissioner of Income tax	 Calcutta	 " A " Range and by the Appellate Tribunal. The Tribunal	 however	 on being moved	 referred the following question to the High Court: " Whether in the facts and circumstances of this case	 the Applicant (the assessee) was entitled to have this dividend income grossed up under section 16(2) and claim credit for tax deducted at source under section 18(5) of the Income tax Act? " The High Court answered the question in the negative	 thus affirming the decisions of the Department and the Appellate Tribunal. The assessee contends that the decision of the High Court is erroneous	 and that it is entitled to have the dividend income I grossed up ' under section 16(2) and also to claim credit for tax deducted at source	 under s.18(5) of the Income tax Act. The relevant sections are as follows: " 16(2) : For the purposes of inclusion in the total income of an assessee any dividend shall be deemed to be income of the previous year in which it is paid	 credited or distributed or deemed to have been 451 paid	 credited or distributed to him	 and shall be increased to such amount as would	 if income tax (but not super tax) at the rate applicable to the total income of the company without taking into account any rebate allowed or additional income tax charged for the financial year in which the dividend is paid	 credited or distributed or deemed to have been paid	 credited or distributed	 were deducted therefrom	 be equal to the amount of the dividend: (proviso omitted). 18 (5): Any deduction made and paid to the account of the Central Government in accordance with the provisions of this section and any sum by which a dividend has been increased under sub section (2) of section 16 shall be treated as a payment of incometax or super tax on behalf. . of the shareholder and credit shall be given to him therefor on the production of the certificate furnished under. .section 20 . in the assessment	 if any	 made for the following year under this Act: (proviso omitted). 49B(1): Where any dividend has been paid	 credited or distributed or is deemed to have been paid	 credited or distributed to any of the persons specified in section 3 who is a shareholder of a company which is assessed to income tax in the taxable territories or elsewhere	 such person shall	 if the dividend is included in his total income	 be deemed in respect of such dividend himself to have paid income tax (exclusive of super tax) of an amount equal to the sum by which the dividend has been increased under sub section (2) of section 16. " It was contended in the High Court that inasmuch as section 16(2) referred to an I assessee	 the assessee company was entitled to have the dividend 'grossed up ' by the addition of income tax paid by the various companies at source and consequently to have the benefit of the credit allowed under the two remaining sections. In the opinion of the High Court	 an assessee whose name was not in the register of members of the companies was not entitled to the benefit of these provisions. The learned Judges of the High Court were of the opinion that the word " shareholder " in 452 s.18(5) had the same signification as the word " member " used in the Indian Companies Act; and that the assessee was not qualified to be considered as a shareholder	 even though by a blank transfer it had 	purchased the relevant shares. In our opinion	 the High Court was right in its conclusion. A company when it pays income tax	 does not do so on behalf of the shareholders. It is itself chargeable under the Act	 In Cull vs Inland Revenue Commissioners (1)	 Lord Atkin stated the law (which in substance is also the law in our country) thus: My Lords	 it is now clearly established that in the case of a limited company the company itself is chargeable to tax on its profits	 and that it pays tax in discharge of its own liability and not as agent for its shareholders. . At one time it was thought that the company	 in paying tax	 paid on behalf of the shareholder; but this theory is now exploded by decisions in this House	 and the position of the shareholders as to tax is as I have stated it. " When the company pays its own income tax and declares a dividend from the balance of its profits	 it deducts from such dividend a proportionate part of the amount of the tax paid by it. This principle is explained in another English case	 and it is substantially also the law in this country. In Inland Revenue Commissioners vs Blott (2)	 Viscount Cave stated the law in these words: " Plainly	 a company paying income tax on its profits does not pay it as agent for its shareholders. It pays as a tax payer	 and if no dividend is declared	 the shareholders have no direct concern in the payment. If a dividend is declared	 the company is entitled to deduct from such dividend a proportionate part of the amount of the tax previously paid by the company; and	 in that case	 the payment by the company operates in relief of the shareholder. But no agency	 properly so called	 is involved. " The share holders	 however	 get the benefit of the payment of the tax by the company. Though under (1) 	 56 ; 	 636. (2) 	 201. 453 s.16(2) of the Act their dividend is increased by a proportionate amount of tax paid by the company	 the payment of the tax by the company is deemed tinder sections 18(5) and 49B(1) to be payment by the shareholders. The rates of income tax applicable to the company are	 in most instances	 higher than the rates applicable to the individual shareholders	 and by this process of 'grossing up '	 as it is commonly called	 the recipient of the dividend gets some benefit. The position of a shareholder who gets dividend when his name stands in the register of members of the company causes no difficulty whatever. But transfers of shares are common	 and they take place either by a fully executed document such as was contemplated by Regulation 18 of Table A of the Indian Companies Act 1913	 or by what are known as blank transfers '. In such blank transfers	 the name of the transferor is entered	 and the transfer deed signed by the transferor is handed over with the share scrip to the trans feree	 who	 if he so chooses	 completes the transfer by entering his name and then applying to the company to register his name in place of the previous holder of the share. The company recognises no person except one whose name is on the register of members	 upon whom alone calls for unpaid capital can be made and to whom only the dividend declared by the company is legally payable. Of course	 between the transferor and the transferee	 certain equities arise even on the execution and handing over of 'a blank transfer '	 and among these equities is the right of the transferee to claim the dividend declared and paid to the transferor who is treated as a trustee on behalf of the transferee. These equities	 however	 do not touch the company	 and no claim by the transferee whose name is not in the register of members can be made against the company	 if the tranferor retains the money in his own hands and fails to pay it to him. A glance at the scheme of the Indian Companies Act	 1913	 shows that the words " member "	 " shareholder " and " holder of a share " have been used interchangeably in that Act. Indeed	 the opinion of most of the writers on the subject is also the same. 454 Buckley on the Companies Act	 12th Edition	 page 803 has pointed out that the right of a transferee is only to call upon the company to register his name and no more. No rights arise till such registration 	takes place. Section 2(16) of the Indian Companies Act	 1913	 defines " share " as " share in the share capital of the company Section 5 deals with the mode of forming incorporated companies	 and in the case of companies limited by shares	 the liability of the members is limited to the amounts	 if any	 unpaid on the shares respectively held by them. By section 18	 Table A is made applicable to companies	 unless by the Articles of any company the terms of Table A have been excluded or modified. Regulation 18 of Table A reads as follows: " The instrument of transfer of any share in the company shall be executed both by the transferor and transferee	 and the transferor shall be deemed to remain holder of the share until the name of the transferee is entered in the register of members in respect thereof. " The words " holder of a share " are really equal to the word shareholder and the expression " holder of a share denotes	 in so far as the company is concerned	 only a person who	 as a shareholder	 has his name entered on the register of members. A similar view of the Companies Clauses Consolidation Act	 1845	 was taken in Nanney vs Morgan(1). The learned Lord Justices held that under section 15 of that Act	 the transferee bad not the benefit of a legal title till certain things were done	 which were indicated by Lopes	 L.J.	 in the following passage: " Therefore the transferor	 until the delivery of the deed of transfer to the secretary	 is subject to all the liabilities and entitled to all the rights which belong to a shareholder or stockholder	 and	 in my opinion until the requisite formalities are complied with	 he continues the legal proprietor of the stock or shares subject to that proprietorship being divested	 which it may be at any moment	 by a compliance with the requisite formalities. (1) 	 356. 455 The same position obtains in India	 though the completion of the transaction by having the name entered in the register of members relates it back to the time when the transfer was first made. See Nagabushanam vs Ramachandra Rao (1). During the period that the transfer exists between the transferor and the transferee without emerging as a binding document upon the company	 equities exist between them	 but not between the transferee and the company. The transferee can call upon the transferor to attend the meeting	 vote according to his directions	 sign documents in relation to the issuance of fresh capital	 call for emergent meetings and inter alia	 also compel the transferor to pay such dividend as he may have received. See E. D. Sassoon & Co. Ltd. vs Patch (2) approved in Mathalone vs Bombay Life Assurance Co. Ltd. (3 ). But these rights though they	 no doubt	 clothe the transferee with an equitable ownership 	 are not sufficient to make the transferee a full owner	 since the legal interest vis a vis the company still outstands in the transferor; so much so	 that the company credits the dividends only to the transferor and also calls upon him to make payment of any unpaid capital	 which may be needed. The cases in Black vs Homersham (4) or Wimbush	 In re Richards vs Wimbush (5) hardly advance the matter further than this. The position	 therefore	 under the Indian Com panies Act	 1913	 is quite clear that the expression " shareholder " or " holder of a share " in so far as that Act is concerned	 denotes no other person except a " member ". The question that arises in the present case is whether by reason of sections 16(2) and 18(5) the assessee	 who was a transferee on a blank transfer ' is entitled to the benefits of the grossing up of the dividend income. Learned counsel for the assessee strenuously contends that the assessee being an owner in equity of the shares and thus also of the dividend is entitled to this benefit. He refers to the use of the word I assessee in section 16(2). The Department	 on the (1) Mad. 537. (3) ; (2) (4) (1878 79) L. R. (5) 456 other hand	 says that the dividend can be increased under section 16(2) and credit allowed under section 18(5) if the assessee is a 'shareholder '	 because the benefit of section 18(5) can go only to the shareholder	 i. e.	 a person with his name on the register of members	 and not to a person holding an equity against such shareholder. The assessee contends that the word " shareholder " includes even a person who holds a share as a result of a blank transfer	 and does not necessarily mean a member of the company	 whose name is on the register of members. Authorities on this point are not wanting	 and indeed	 in the judgment of the Calcutta High Court they have all been referred to. They are all against the assessee. See Shree Shakti Mills Ltd. vs Commissioner of Income tax (1)	 Jaluram Bhikulal vs Commissioner of Income tax (2)	 Arvind N. Mafatlal vs Incometax Officer (3) and Bikaner Trading Co. vs Commissioner of Income tax (4). The question that falls for consideration is whether the meaning given to the expression "shareholder" used in section 18(5) of the Act by these cases is correct. No valid reason exists why " shareholder " as used in section 18(5) should mean a person other than the one denoted by the same expression in the Indian Companies Act	 1913. In In re Wala Wynaad Indian Gold Mining Company (5)	 Chitty	 J.	 observed: " I use now myself the term which is common in the Courts	 I a shareholder '	 that means the holder of the shares. It is the common term used	 and only means the person who holds the shares by having his name on the register. " Learned counsel for the assessee cited a number of authorities in which the ownership of the dividend was in question	 and it was held that the transferee whose name was not registered	 was entitled to the dividend after transfer had been made. These cases are Commissioners of Inland Revenue vs Sir John Oakley (6)	 Spence vs Commissioners of Inland Revenue (7) (1) (3) (5) 	 854. (2) (4) (6) 	 (7) 457 and others cited at page 367 in Multipar Syndicate	 Ltd. vs Devitt (1). No one can doubt the correctness of the proposition in these cases	 but from an equitable right to compel the transferor to give up the dividend to the transferee	 to a claim to the dividend by him as a " shareholder " against the company is a wide jump. In so far as the company is concerned	 it does not even issue the certificate under section 20 of the Income tax Act in the name of an unregistered transferee but only in the name of the transferor whom it recognises	 because his name is borne on its books. Section 20 lays down: " The principal officer of every company shall	 at the time of distribution of dividends	 furnish to every person receiving a dividend a certificate to the effect that the company has paid or will pay income tax on the profits which are being distributed	 and specifying such other particulars as may be prescribed. " The meaning of section 20 as also of section 18(5) is clear if they are read with section 19A	 under which information regarding dividends has to be supplied by the company when demanded by the Income tax Officer. It lays down: " The principal officer of every company . shall	 on or before the 15th day of June in each year	 furnish to the prescribed officer a return in the prescribed form and verified in the prescribed manner of the names and of the addresses	 as entered in the register of shareholders maintained by the company	 of the shareholders to whom a dividend or aggregate dividends exceeding Such amount as may be prescribed in this behalf has or have been	 distributed during the	 preceding year and of the amount so distributed to each such shareholder. " (Italics supplied). Section 19A makes it clear	 if any doubt existed	 that by the term " shareholder " is meant the person whose name and address are entered in the register of " shareholders " maintained by the company. There is but one register maintained by the Company. There (1) 58 458 is no separate register of " shareholders " such as the assessee claims to be but only a register of " members ". This takes us immediately to the register of members	 and demonstrates that even for the purpose of the Indian Income tax Act	 the words '	member and " shareholder " can be read as synonymous. The words of section 18(5) must accordingly be read in the light in which the word " shareholder " has been used in the subsequent sections	 and read in that manner	 the present assessee	 notwithstanding the equitable right to the dividend	 was not entitled to be regarded as a "shareholder" for the purpose of section 18(5) of the Act. That benefit can only go to the person who	 both in law and in equity	 is to be regarded as the owner of the shares and between whom and the company exists the bond of membership and ownership of a share in the share capital of the company. In view of this	 we are satisfied that the answer given by the Calcutta High Court on the question posed by the Tribunal was correct. The appeal fails	 and is dismissed with costs. Appeal dismissed.

The assessee acquired shares in certain companies under "blank transfers " without getting the transfers registered with the companies and it received dividends in respect of these shares. It claimed that the dividend income should be grossed up under section 16(2) Income tax Act and that it should be allowed credit under section 18(5) for the tax deducted at source on the dividend in the hands of the companies. Held	 that	 the assessee was not entitled to the benefits of sections 16(2) and 18(5) as its name was not in the register of members of the companies. The benefit of section 18(5) could only go to a shareholder; and a shareholder in that section meant the same thing as in the Indian Companies Act	 1913	 i. e.	 a " member having his name on the register. The scheme of the Indian Companies Act	 1913	 shows that the words " member "	 " shareholder " and " holder of a share " have been used interchangeably. The words "holder of a share" are really equal to the word "shareholder" and the expression " holder of a share " denotes only a person who	 as a shareholder	 has his name entered on the register of members. In re Wala Wynaad Indian Gold Mining Company	 (1882) 21 Ch. D. 849	 Shree Shakti Mills Ltd. vs Commissioner of Income tax	 	 jaluram Bhikulal vs Commissioner of Income tax	 	 Arvind N. Mafatlal vs Incometax Officer	 [1957] 32 I.T . R. 350	 Bikaner Trading Co. vs Commissioner of Income tax	 	 referred to. A company when it pays income tax does not do so on behalf of the shareholders	 but the shareholders get the benefit of such payment. The rates of income tax applicable to the company are	 in most instances	 higher than the rates applicable to individual shareholders and by the process of grossing up the recipient of the dividend gets some benefit. Cull vs Inland Revenue Commissioners	 and Inland Revenue Commissioners vs Blott	 	 referred to. 440 In blank transfers the transfer deed signed by the transferor is handed over with the share scrip to the transferee who may complete the transfer by entering his name and applying to the company for registration of his name. The company only recognises those persons whose names are on the register of members and they alone are legally entitled to the dividend declared. In the case of a blank transfer equities exist between the transferor and the transferee and the transferee has a right to claim the dividend from the transferor who holds it in trust for him	 but the company is only liable to the transferor and not to the transferee. Though the transferee is clothed with an equitable ownership he is not a full owner	 since the legal interest vis a vis the company still outstands in the transferor.