9911796707
TMI Blog1982 (10) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... transferred for Rs. 2,87,950, which is the aggregate sale price whereas the aggregate of the written down value as on 1-4-1974 was Rs. 4,09,475. The ITO in the income-tax assessment assessed the company after invocation of section 52(2) of the Income-tax Act, 1961 ('the 1961 Act') to capital gains estimating the fair market value at Rs. 5,23,000. But the AAC, with whom the Tribunal agreed, cancelled that levy. Later, one of the directors was assessed for the difference between the fair market value and the sale price of the buses sold to him under section 2(22) of the 1961 Act (deemed dividend). That also on an appeal by the assessee was cancelled by the Tribunal. Now the difference between the fair market value and the sale price is assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. However, the enactment was struck down by the Madras High Court by their judgment on 19-4-1973 reported in 86 Law Weekly Supplement, Parts 13 and 14. The Government preferred an appeal to the Supreme Court. It is not known as to what happened to that appeal except to state that the Supreme Court has not till now reversed or upheld that High Court judgment. But it is a fact and also a matter of common knowledge that in Tamil Nadu the bus transport was thereafter step by step nationalised, perhaps by refusal of fresh permits or renewal of expired permits. It is also a well known fact that in spite of the judgment of the Madras High Court, the Government had stood firm on their policy on nationalisation. The assessee had also furnished a pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oon ? Buses by the themselves do not yield any income unless they are plied on the routes. If that is not possible, no reasonable man will go to buy these buses. The fact that the Government may pay compensation of Rs. 5 lakhs is no consolation. Why should a man pay Rs. 5 lakhs to purchase buses, own it for sometime, and get back the amount of Rs. 5 lakhs ? He can as well refuse to buy. Further, what is the guarantee that Rs. 5 lakhs will be paid ? The law providing for compensation has been struck down. The Government may not, therefore, revive the law for nationalisation of buses. The nationalisation can be effected by refusal of permits to ply as was subsequently done. Acquisition is not the only method of nationalisation. Refusal of per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation was struck down and when the Government is bent upon nationalisation and when nationalisation can be achieved by resort to refusal of permits and without acquisition, in which event the ownership and possession of buses become useless and a burden, it is not possible to say that Rs. 5,23,000 is the market value and that Rs. 2,87,950 is and cannot be the market value. 4. The simple question before us is whether the sale of 14 buses on 1-6-1974 is a sale otherwise than for adequate consideration. We have placed ourselves in the place of a willing buyer as on 1-6-1974. We find it extremely difficult, rather impossible to hold that the sale is otherwise than for adequate consideration. No reasonable man could have paid on that date Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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