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TMI Blog1956 (2) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... Rajagopalan, J.- The question referred to this Court under section 66(1) of the Income-tax Act was: "Whether the sum of ₹ 31,250 was rightly taxed." The assessee held ten shares of the face value of ₹ 8,750 in Sri Kannan Rice Mills Ltd., hereinafter referred to as the company. The subscribed capital of the company was ₹ 43,750 most of which was apparently spent on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ative basis for sustaining the assessment was that it amounted to capital gains, taxable under section 12B of the Income-tax Act, which in the opinion of the Tribunal was more favourable to the assessee. It should be noted that the company itself was assessed to capital gains under section 12B and that was sustained by this Court in R.C. No. 8 of 1951 Sec [1954] 26 ITR 351. Obviously section 12B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tuted "dividend" within the meaning of section 2(6A)(c) and we refrain from expressing any opinion on that question. Assuming without deciding it, that the amount was dividend which accrued to the assessee in his accounting year, the proviso to section 2(6A)(c) should suffice to exclude the amount in the assessment year in question. Assuming that the distribution by the liquidator was ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , and Tendolkar, J., in Sheth Haridas Achratlal v. Commissioner of Income-tax [1955] 27 ITR 684. See the observations at pages 688 and 689. We respectfully agree with the view taken by the learned Judges of the Bombay High Court: if we may say so with respect, the significance of the expression " six previous years of the company preceding the date of liquidation" in the proviso to sub-c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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