9911796707
TMI Blog1976 (9) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... " The facts which give rise to this question are as follows: The assessee was a company engaged in taking up contracts for construction of buildings and for supply of building materials. During the course of its business, it had obtained large amounts of loans and other credit facilities from banks and other financiers. It had acquired 21 lorries and 2 cars for the purpose of its business. These cars and lorries were acquired under hire-purchase agreements entered into with the respective financiers. The company had acquired wooden logs over which also the financiers and the bankers had control and rights. The company was directed to be wound up by orders of this court dated 11th August, 1961, in Company Petition No. 21 of 1961. The offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over the respective assets. The official liquidator was directed to pay the amounts due to the claimants out of the net sale proceeds after deducting the expenses, other charges and costs, as the company at the material time had not become the owner of the lorries, the lorries being the property of the financiers or the bankers. The position regarding the logs which were also directed to be sold was considered to be the same as that relating to the lorries as the hypothecatees had rights over the same. The net sale proceeds of the wooden logs had also been invested in treasury bills and other deposits with the State Bank of India. The High Court directed the payment of the respective amounts to the persons who were entitled to the same. Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be assessed in the hands of the company. The Tribunal accepted the claim of the official liquidator with reference to these amounts, namely, Rs. 4,357 and Rs. 10,855.75, and deleted the said amounts from the assessments of the assessee-company. It is this conclusion which has given rise to the question set out above. Before proceeding further, we may point out that there is a statement annexed to the statement of the case as annexure "A" in which it is found that out of the sale proceeds of Rs. 4,32,304.09 which was kept in the deposit in non-distributable deposit account in accordance with the directions of this court, a sum of Rs. 3,59,608.16 represents the net sale proceeds of the lorries and the balance represents the sale proceeds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of financing hire purchase agreement the financier being the owner is entitled to be treated as preferential creditor by the official liquidator and no question of conflict of his interests with the other creditors will arise." Basing himself on the words "preferential creditor" occurring in the above passage, the submission of the learned counsel was that even the persons in whose favour hire purchase agreements were executed by the company in respect of the lorries would stand only in the position of the creditors and, therefore, the interest must be deemed to belong only to the company. We are unable to accept this submission. The finding of fact by the Tribunal as well as the agreed statement of the case go to show that the lorries ..... X X X X Extracts X X X X X X X X Extracts X X X X
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