9911796707
TMI Blog1991 (1) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... f section 54E of the Act, the assessee made fixed deposit of Rs. 4,20,000 on October 18, 1977, with the United Bank of India, Beliaghat Branch, Calcutta, for 61 months with effect from October 18, 1977, on interest of, 10% per annum. The assessee follows the Bengali calendar year, as its accounting year. Subsequently, on January 18, 1978, the aforesaid term deposit was reinvested in 84 term deposits of Rs. 5,000 each. In the return for the assessment year under consideration, the assessee disclosed the amount of Rs. 116,904 as interest. The Income-tax Officer enquired why the amount of Rs. 16,904 Was shown as interest in the place of, Rs. 42,000. In reply, the assessee stated that the liquidator, appointed subsequently, distributed 38 term deposits amounting to Rs. 1,90,000 on March 11, 1978, and credited 27 term deposits amounting to Rs. 1,35,000 to the accounts of the respective shareholders. On a consideration of the inspection report of the Income-tax Inspector and other materials, the Income-tax Officer was of the opinion that the term, deposits were not actually transferred. As such, he assessed to tax the amount of Rs. 31,105 after deducting the expenses of Rs. 10,895 from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts and circumstances of the case, we agree with the authorities below that there was no transfer of the term deposits by the assessee to the shareholders and that as such the interest was assessable in the hands of the assessee. In view of this finding, it is not necessary to enter into the alternative argument of the authorised representative for the assessee that at best the assessee was a trustee in respect of these term deposits." At the hearing Mr. Bajoria, learned counsel for the assessee, contended that the conclusion of the Tribunal is erroneous inasmuch as the liquidator divested himself of the ownership of the fund which was transferred to the shareholders. It is his contention that the transfer of the fixed deposit can be made without any written document and the facts of this case would amply demonstrate that, in fact, the transfer was made in favour of the shareholders and the income accrued on the fixed deposit could not, therefore, be assessed in the hands of the liquidator. He has relied on a few decisions to which we shall presently refer. On the other hand, the contention of learned counsel for the Revenue is that all the necessary papers and documents wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further provided in the said indenture as follows : "To have and to hold the said term deposit receipts unto and to the use of the said shareholder during 61 (sixty-one) months from the date of investment and to appropriate the interest thereon in the meantime with the right to encash and appropriate on maturity the amounts deposited under the respective term deposit receipts absolutely and forever." A similar indenture was made on November 10, 1978, by and between the liquidator and the shareholder, Sachindra Nath Bose, for transfer, inter alia, of two term deposit receipts. It may be mentioned that a resolution was passed on March 24, 1978, authorising interim distribution. By several letters, all dated March 14, 1978, the liquidator informed the bank to credit the savings bank account of the bank with future monthly interest as and when the same would fall due in respect of the term deposit receipts mentioned in the said letters. Certificates were issued by the bank to the following effect : "This is to certify that the monthly interest on the following fixed deposit receipts held in the name of Chandipore Fisheries (Pvt.) Ltd., 21, Charakonga Road, Calcutta-700 010, was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ator. There, the question was whether the title to the fixed deposit receipt passed to the bank. In that case, the learned single judge held that, in order to pass title to a fixed deposit receipt and the money represented by it, it is not necessary that an instrument should be executed in any particular form or that the instrument should contain any particular words or formula. It is sufficient if the intention to transfer the receipt and the money covered by it appears from the language used by the parties, whether the relevant writing is made on the back of the receipt or on a separate piece of paper. The said observation was based on Mulla's observation oil the Transfer of Property Act where the learned author said that no particular form or word is necessary in order to effect an assignment, if the intention is clear from the language used. It was also held in that case that, under section 130 of the Transfer of Property Act, the title passes to and vests in the assignee or transferee on the execution of the transfer deed,and no further action on his part such as sending a notice to the debtor as under the English law is necessary to complete his title. Reliance has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )(a), and, therefore, the legal estate in fee simple in the freehold property was excepted from the provisions of the Companies Act, 1929, section 296, and was not determined by the dissolution of the company, but continued in existence subject to the trusts on which it was formerly held by the company ; since there was no necessity for creating any new legal interest, the Law of Property Act, 1925, section 181, did not apply ; and, accordingly, under the Trustee Act, 1925, section 44(ii)(c), the court could make an order vesting the properties in the shareholders for all the estate therein formerly vested in the company as joint tenants on trust for sale. On a careful consideration of the facts and circumstances of this case, where of the view that the fixed deposit receipts had, in fact, been made over to the shareholders and the resolution for the distribution of the proceeds of the said fixed deposit receipts were duly passed and that intimation was also furnished to the bank concerned about the transfer. On a construction of the letters written by the liquidator to the Manager, United Bank of India, and the certificates given by him to which reference has already been made, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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