9911796707
TMI Blog1977 (8) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the ITO, should have treated the assessee as resident and, accordingly, tax should have been charged. It was submitted that the Bank of China went into liquidation as per orders of the Hon'ble High Court at Calcutta in the year 1962 and in pursuance of the said orders the Official Liquidator, High Court Calcutta had been appointed as Official Liquidator of the Bank with the result that the entire assets and liabilities of the bank came under the control and management of the Calcutta High Court and the entire affairs of the bank were being managed and carried on by the Official Liquidator, High Court, Calcutta. The assessee's learned Representative further submitted that the Official Liquidator was not a more agent or a care-taker of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irs of this company are carrying of banking business. The Bank went into liquidation in 1962 due to hostilities between India and China. The Official Liquidator of the Calcutta High Court has been realising the interest of fixed deposits and making payments, towards the liabilities. The Liquidator has been merely acting as an Agent for a limited purpose. He has no authority to carry on banking business which is the main affairs of the Bank. It may be stated that the banking activities have been suspended temporarily and these activities may renew after normal relationship is re-established between the two countries. There is no evidence that the constitution of the Board of Directors which was formed in China, has been changed or in any way ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carry on banking business which was the main affairs of the bank. In this regard he refers us to the case of CIT vs. National Mills Co. Ltd. 34 ITR 155 (Bom) and draws our attention to the observations appearing at page 162 of the Reports that the fact that company had gone into liquidation did not prevent the liquidator from carrying on business. Learned counsel, therefore, urges us to direct the ITO for taxing the assessee as a resident. 6. On the other hand, the Departmental Representative support the authorities below in their decision and submits that the CIT rejected the assessee's revision petition for the asst. yr. 1973-74 holding that the Official Liquidator was merely acting as Representative of the foreign bank and, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent in India for the purpose of taxation. In this regard we have first to comprehend the scope and meaning of the expression that the control and management of its affairs are situated wholly in India appearing in s. 6(3)(ii) of the IT Act, 1961. This was examined by the Hon'ble Supreme Court in the case of CIT vs. Nandalal Gandalal 40 ITR 1 (SC). Of-course, the issue there related to the determination of residential statues of an HUF in terms of s. 4A(b) of the Indian IT Act, 1922 corresponding to s. 6(2) of the IT Act, 1961 and the expression therein is that the control and management, of its affairs is situated wholly outside India. The expression "control and management" signifies controlling and directive power, "the head brain". The c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s learned counsel before us to the effect that the Board of Directors of the foreign bank became functus officio and the Official Liquidator under the control and management of the Hon'ble High Court at Calcutta had been entirely managing and controlling the affairs of the foreign bank from India. 9. Coming to the Departmental contention that the Official Liquidator was assessed as a Representative assessee in accordance with the provisions of s. 160 and 161 of the IT Act, 1961, we do not, however, find any merits in the same when the ITO could not in view of the appointment of the Official Liquidator by the Hon'ble High Court at Calcutta assess the Bank of China Directly. Be it as it may, the question will boil down to the issue as to wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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