9911796707
TMI Blog1990 (8) TMI 178X X X X Extracts X X X X X X X X Extracts X X X X ..... cted by the assessee. The said ship met with an accident and sunk in the sea on 2-2-1979. The assessee received insurance money of Rs. 1 lakh from the Insurance company in assessment year 1981-82. The ITO being of the view that since the aforesaid events had taken place within a period of 8 years from assessment year 1976-77 the development rebate originally allowed required to be withdrawn. For this purpose he issued a show-cause notice to the assessee within the meaning of section 155(5). 3. In reply the assessee contended that the said ship had neither been sold or transferred since it met with an accident and sank in the sea due to an act of God. It was thereby argued that the development rebate could not be withdrawn. 4. The ITO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereafter that nothing had been sold or tran sferred since this was a case of a total loss of an asset owned by the appellant there even being no salvage. 7. The learned counsel for the assessee also referred to the decisions relied upon by the CIT(A) in confirming the order of the ITO with the submission that these were distinguishable on facts and not applicable. The decision in the case of Marybong Kyel Tea Estates Ltd. according to him related to the question of capital gains arising as a result of assets being damaged by fire, the salvage being taken over by the Insurance Company and the amount paid by the said company to the appellant being in excess of the balancing charge. According to him, on the aforesaid facts the Hon'ble H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had been such an extinguishment of the assessee's right in favour of the Insurance Company and the action of the ITO required to be confirmed. In reply, the learned counsel for the assessee contended that the definition contained in section 2(47) was not meant to cover situations which arose for consideration under section 155(5). 9. We have examined the rival submissions and have given due attention to the authorities cited at the bar on behalf of the Revenue. In our opinion the order passed by the ITO u/s. 155(5) would require to be set aside inasmuch as the opinion expressed therein is not correct in law. As rightly pointed out by the learned counsel the question to be considered u/s. 155(5) is much narrower than the wider considerati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be applicable only in case the asset " is sold or otherwise transferred " by the assessee to any person other than the Govt., local authority, a corporation established by a Central, State or Provincial Act, or a Government company as defined in section 617 of the Companies Act, 1956. It is an accepted fact between the parties that the sum of Rs. 1 lakh has been received as a compensation from the Insurance Company. Even assuming for the sake of argument that the present transaction constitutes a " transfer " the same would otherwise not attract the provisions of section 155(5) since the Insurance Companies after their nationalisation have become Govt. companies. [Emphasis supplied by us] 12. The various decisions cited at the bar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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