9911796707
TMI Blog1981 (6) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... 297(2)(d)(ii), the Appellate Tribunal was justified in holding that the sum of Rs. 12,26,206 could not be assessed as the income of the assessee for the year under consideration ? " The assessee is a registered firm and the reference relates to the assessment year 1955-56. There was a private limited company under the name and style of M/s. Hall Anderson Ltd., whose entire shares were purchased in the name of the assessee-firm, M/s. Madanlal Sohanlal, some time in September, 1946, for Rs. 80,00,000. Later on, a public limited company under the same name of M/s. Hall Anderson Ltd. was floated which purchased the entire assets and liabilities of the said private limited company for Rs. 80,00,000 some time in December, 1946. Under the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceived Rs. 80,00,000 on behalf of the Private Ltd. Co. when the assets of this company were sold to M/s. Hall Anderson (Public) Ltd. This amount has been shown in the assets side of the Pvt. Ltd. Company's balance-sheet as an advance recoverable in cash from director. This advance included accumulated profits of Rs. 12,26,206 relating to the private limited company. Since the assessee-firm being the only shareholder of the company, should be regarded as the director in receipt of the said advance which has not yet been paid to the company so far. I have reasons to believe that deemed dividend of Rs. 12,26,206 by virtue of section 12(1B) read with section 2((6A)(e)) of the Indian I.T. Act, 1922, escaped assessment and action u/s. 147 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disclosed by the assessee to the revenue authorities and, therefore, if the ITO did not take proper action at the time of the original assessment and was not informed of what legal inferences should have been drawn from the facts disclosed and how the law should be applied to the facts of the case, s. 147(a) of the I.T. Act, 1961, was not attracted. The Tribunal further held that if an assessment was reopened in view of s. 297(2)(b) read with s. 297(2)(d)(ii) of the I.T. Act, 1961, the assessment should be made in accordance with the provisions of the new Act, and since under the 1961 Act there was no provision similar to s. 12(1B) of the Indian I.T. Act, 1922, there was no question of any amount being treated as dividend under the provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be assailed in a reference. The Tribunal was justified in the view it took. We, therefore, answer the first question in the affirmative and in favour of the assessee. So far as the second question is concerned though it does not survive in the view we have taken, as it would be of an academic nature, it appears to us that the Tribunal was in error in the view it took on this aspect of the matter. In this connection reference may be made to the observations of the Supreme Court in the case of Govinddas v. ITO [1976]. 103 ITR 123, where the Supreme Court observed that the words "all the provisions of the new Act shall apply accordingly " in cl. (ii) of s. 297(2)(d) of the I.T. Act, 1961, merely refer to the machinery provided in the new Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r liabilities. The word 'accordingly', in the context, means nothing more than 'for the purpose of assessment' and it clearly suggests that the provisions of the new Act which are made applicable are those relating to the machinery of assessment. The substantive law to be applied for determining the liability to tax must necessarily be the law under the old Act, for, that is the law which applied during the relevant assessment years and it is that law which must govern the liability of the parties. Though subsections (1) to (5) of section 171 merely lay down the machinery for assessment of a Hindu undivided family after partition, sub-section (6) of section 171 is clearly a substantive provision imposing a new liability on the members for t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
