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TMI Blog1989 (3) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... SRA. and R. S. PATHAK. JUDGMENT The judgment of the court was delivered by PATHAK C. J. I.- The assessee is a Hindu undivided family deriving income from interest on securities, dividends, property and dealing in shares. In 1941, the assessee purchased a share of Shorrock Spinning and Manufacturing Co. Ltd., hereinafter referred to as "the Shorrock Co.", of the face value of Rs. 1,000 for Rs. 3,307. Later, this share was split into 10 shares of Rs. 100 each, and from time to time a total of 80 shares of the face value of Rs. 100 each was issued to the assessee by way of bonus shares. In consequence, on December 31, 1959, the assessee owned 90 shares in the Shorrock Co. of the face value of Rs. 100 each. There is another company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rected that the Shorrock Co. should Me a certified copy of the order with the Registrar of Companies within 14 days for registration, and on such certified copy being delivered, the transferor-company would stand dissolved and the Registrar of Companies was to place all the documents relating to the transferor-company on the file relating to the transferee company and the folios relating to the two companies were to be consolidated accordingly. During the assessment proceedings for the assessment year 1961-62, the previous year being the financial year ended March 31, 1961, the Income-tax Officer, although apprised of the fact of the scheme of amalgamation and of the acquisition by the assessee of 45 shares of the New Shorrock Co., omitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for under section 12B of the Act ? 2. If the answer to the above question is in the affirmative, whether the said sum of Rs. 49,350 was assessable in the year 1961-62 ?" Before the High Court, the Revenue did not contend that the transaction constituted a sale or a transfer and the parties confined themselves to the point as to whether the transaction represented an exchange or relinquishment for the purposes of section 12B. The High Court took the view that no exchange can be said to have taken place on the allotment of the 45 shares of the New Shorrock Co. under the scheme of amalgamation. Nor, in the opinion of the High Court, did it constitute a relinquishment. In the result, the High Court answered both the questions in favour o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ock Co. deprived the holding of the 90 shares of that company of all value. On the question whether there was any relinquishment, the decision must again be against the Revenue. A relinquishment takes place when the owner withdraws himself from the property and abandons his rights thereto. It presumes that the property continues to exist after the relinquishment. Upon amalgamation, the shares of the Shorrock Co., as has been mentioned earlier, lost all value as that company stood dissolved. There is no relinquishment. The connected cases raise similar questions and are dealt with accordingly. In the result, we agree with the view taken by the High Court and dismiss these appeals with costs. Appeals dismissed. - - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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