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Issues:
1. Assessment of dividend received by the assessee as capital gains under section 12B of the Indian Income-tax Act, 1922. 2. Applicability of section 46(2) of the Income-tax Act, 1961, for the assessment year 1961-62. Analysis: The High Court of Calcutta addressed two main issues in this judgment. Firstly, it examined whether the dividend received by the assessee from a liquidated company should be assessed as capital gains under section 12B of the Indian Income-tax Act, 1922. The court emphasized that no capital gain could arise as the shares were not sold or transferred by the assessee. The receipt was deemed as surplus available for distribution to the shareholder, not capital gains, based on legal precedents cited, including Commissioner of Income-tax v. Madurai Mills Co. Ltd. The court ruled in favor of the assessee on this issue. Secondly, the court considered the contention regarding the applicability of section 46(2) of the Income-tax Act, 1961, for the assessment year 1961-62. The revenue argued that the Income-tax Officer must assess the received sum as capital gains under section 46(2) due to the filing of the return after the commencement of the new Act. However, the court held that the substantive law of the assessment year, which was section 12B of the Indian Income-tax Act, 1922, should be applied. It rejected the revenue's argument to retroactively impose new tax liabilities on the assessee based on the new Act's procedural provisions. The court distinguished cases cited by the revenue's counsel, highlighting that they did not support the revenue's contentions in the present case. Ultimately, the court answered the questions raised in the negative for the revenue on the first issue and in the affirmative for the assessee on the second issue. The judgment concluded without any order as to costs. Both judges, S. K. Hazra and S. C. Deb, concurred with the decision.
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