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TMI Blog1986 (6) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... td., a private limited company. Thereafter, a public limited company in the same name, namely, Hall Anderson Ltd., was floated and the assets of the private limited company were sold to the public limited company for Rs. 80 lakhs. The said amount was received by the firm on behalf of the private limited company. In the balance-sheet of the private limited company as on March 31, 1947, the said amount of Rs. 80 lakhs was shown " as an advance recoverable in cash from a director ". In the assessment, the Income-tax Officer found that on the date of the transfer of the shares of the private limited company to the public limited company, the former had accumulated profits to the extent of Rs. 12,26,206 consisting of balances in the reserve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocedure and substantive law by the later Act of 1961. The Tribunal found that as there was no provision corresponding to section 12(1B) of the Indian Income-tax Act, 1922, in the Income-tax Act, 1961, the said amount could not be treated as deemed dividend in the hands of the assessee. The Tribunal found further that it appeared from the assessment order that the Income-tax Officer had proceeded on the basis of section 2(22)(e) of the Income-tax Act, 1961. Inasmuch as the advance in the instant case was made during the previous year relevant to the assessment year 1947-48, the assessment could not have been made under section 2(22)(e). The Tribunal found further that there was no material to show that any amount had been received by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncometax Act, 1961, this court directed the Tribunal to refer the following questions also stated to be questions Of law arising out of the order of the Tribunal for the opinion of this court. These two questions have come up in Income-tax Reference No. 560 of 1979: " 1. Whether, on the facts and in the circumstances of the case, the Tribunal had ignored relevant evidence or had relied on irrelevant materials to hold that the sum Rs. 80,00,000 was not paid to the assessee by M/s. Hall Anderson Pvt. Ltd. by way of loan or advance and whether such finding of the Tribunal was otherwise unreasonable or perverse ? 2. Whether, on the facts and in the circumstances of the case, the reference to section 2(22)(e) of the Income-tax Act, 1961, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding on the 31st day of March, 1956, if such loan or advance remained outstanding on the first day of such previous year. Income-tax Act, 1961: "Section 2(22).- 'dividend' includes--... (e) any payment by a company, not being a company in which the public are substantially interested, of any sum (whether as representing part of the assets of the company or otherwise) by way of advance or loan to a shareholder, being a person who has a substantial interest in the company, or any payment by any such company on behalf, or for the individual benefit, of any such shareholder, to the extent to which the company in either case possesses accumulated profits. " Construing the said sections, the learned advocate for the Revenue submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1922, in the Income-tax Act of 1961 and, therefore, the assessment could not be made. In support of his contentions, the learned advocate for the Revenue cited a decision of this court in CIT v. Madanlal Sohanlal [1982] 137 ITR 29, where it was held by this court, following a decision of the Supreme Court in Govinddas v. ITO [1976] 103 ITR 123, that where an assessment was reopened under sections 147 and 148 of the Income-tax Act, 1961, the substantive law to be applied for determining the liability to tax must necessarily be the law under the old Act for that was the law, viz., the old law, which would govern the liabilities of the assessee. The learned advocate for the Revenue next submitted that it was found by the Income-tax O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment was made by the private limited company to the assessee. On the contrary, the clear evidence was that the amount was paid by the private limited company to the firm. The accounts of the firm showed that the same had been advanced to a director and was recoverable in cash. There was no evidence to connect this entry with the assessee. In any event, in this advisory jurisdiction, we are not sitting in appeal over the order of the Tribunal. In our view, there was sufficient material before the Tribunal to come to the conclusion that no payment had been made by the private limited company or the said firm to the assessee and there is no reason why we should interfere with this finding of fact. For the above reasons, we answer the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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