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2006 (10) TMI 229 - SC - Companies LawWhether the portion of Golf Links property which at the time of settlement was occupied by Shri Narendra Nath Nanda be not allotted to him? Whether appropriate directions be given so that the appellants be made liable for payment of capital gains tax, if any, levied in future which levy shall be challenged by Respondent No. 1-Company, provided the funds are made available to it by the appellants for the purpose? Whether the judgment of the High Court could be suitably modified to provide for challenge by respondent-company to any order that may be passed in future by the tax authority imposing capital gains tax on the hypothetical transfers made under the settlement? Held that:- Appeal allowed by way of remand. That the judgment and order of the High Court is modified to the extent that appellant No. 2, namely - Shri Narendra Nath Nanda shall be allotted the portion of the Golf Links house which was in his occupation on the date of settlement, and the value thereof shall be adjusted against his share. If something remains to be paid even after adjustment, the appellants shall pay such amount within a period of two months from the date of the order of the High Court. That no deduction shall be made from the value of the assets of the anticipated capital gains tax liability on the hypothetical sale under the settlement. In case a demand of capital gains tax is made by the tax authority in future against respondent-company, the aforesaid Company shall be entitled to challenge the imposition of such tax subject to appellant No. 2 providing sufficient funds to the respondent-company for this purpose. In any event, the capital gains tax, if found payable, shall be the liability of the appellants to be discharged by them. They shall furnish an undertaking before the High Court accepting such liability, and shall execute a document creating a charge on the assets allocated to them under the settlement to discharge capital gains tax liability, if found payable.
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