9911796707
TMI Blog1978 (8) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... became entitled to receive 9/68ths share in the properties bearing municipal holding No. 368 inclusive of the construction and structure standing thereon. The value of the assessee's share as on January 1, 1954, was estimated by him at Rs. 3,996. The liquidator, however, valued the appellant's share at Rs. 4,500. The ITO estimated the fair market value of the assessee's share in the capital asset as on October 1, 1963, at Rs. 15,222 and, after giving necessary deductions, included a sum of Rs. 11,226 in the total income of the assessee as income from capital gains. The main contention which the assessee raised before the AAC in the appeal was that the assets received by him on the liquidation of the company did not arise from the transfe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned, this court held that the amount received by the assessee as shareholder on the liquidation of the company was not on the transfer of a capital asset within the meaning of s. 2(47) of the Act and, hence, the assessee was not chargeable to income-tax on capital gains under s. 45 of the Act; This court, while answering the second question, however, held that notwithstanding such a position, by virtue of the provisions contained in s. 46(2) of the Act, the amount of capital gain, which would otherwise have not become taxable, would be chargeable to income-tax as such. The decision by this court virtually answers the question which has been raised in this reference. In fact, the Supreme Court, while dealing with the aforesaid decision of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the previous year in which the transfer took place. 46. (1) Notwithstanding anything contained in section 45, where the assets of a company are distributed to its shareholders on its liquidation, such distribution shall not be regarded as a transfer by the company for the purpose of section 45. (2) Where a shareholder on the liquidation of a company receives any, money or other assets from the company, he shall be chargeable to income-tax under the head 'Capital gains', in respect of the money so received or the market value of the other assets on the date of distribution, as reduced by the amount assessed as dividend within the meaning of sub-clause (c) of clause (22) of section 2 and the SUM SG arrived at shall be deemed to be the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a receipt of money or other asset by a shareholder, on the liquidation of a company, in respect of his share, a capital gain chargeable to income-tax as such. In other words, by virtue of the provisions contained in s. 46(2), the money or other asset received by the shareholder in respect of his share held in a company in liquidation, the receipt is deemed to arise from the transfer of a capital asset, which squarely falls within the purview of s. 45 of the Act. It then becomes an income within the meaning of s. 2(24) of the Act. The argument of Mr. Bharuka has, therefore, to be rejected.. Regard being had to the discussions made above, the question is answered in the affirmative and against the assessee i.e., the amount of Rs.. 11,226 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
