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TMI Blog1994 (9) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... pany but to those two groups separately and therefore assessments must be made on those two groups and not in the hands of the assessee-company ? " Messrs. Ithad Motor Transport Pvt. Ltd. is a transport company. There was an internal dispute between the two sets of shareholders. The matter came up before the High Court under the company law. In the course of the proceedings, the court directed as to how the affairs of the company shall be managed as an interim measure. This was the result of a settlement between the two groups. The court made the order that the arrangement for the management of the affairs of the company in terms of the order shall be till the final disposal of the proceedings. The relevant parts of the said order read as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essments were made. The income of both the groups was clubbed together by the assessing authority on the ground that the entire income belonged to the company and could be assessed in the hands of the company as such. The matter came up before the Appellate Tribunal ultimately which allowed the appeal of the assessee-company by holding that the company never received the income. The respective groups which were entrusted with the operation of the assets managed the said assets to derive the income and expenditure and by virtue of the order of the High Court the income belonged to the respective groups. The contention of the Revenue that the company continued to exist and the assets legally belonged to the company and therefore the company a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue, contended that the view of the Appellate Tribunal is opposed to the concept of a company which has a distinct legal personality. It may be that the income was earned by the two groups, but the said income earned by the two groups belonged to the company and the respective groups were allowed to enjoy income as their due share out of the company's income. Learned counsel for the assessee, on the other hand, contended that the income never reached the hands of the company. In view of the overriding effect of the order of the High Court the income stood diverted at the very inception, to the respective groups. We do not think, it is necessary for us to go into the rival contentions. The Revenue has not suffered any loss in the instant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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