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Showing 61 to 70 of 70 Records

• 1965 (2) TMI 31
  
  Issues Involved:
  1. Deduction of income-tax from dividends distributed by the official liquidator.
  2. Classification of profits earned during liquidation as dividends.
  3. Applicability of Section 2(22)(c) of the Income-tax Act, 1961.
  4. Interpretation of "accumulated profits" and "date of liquidation."
  
  Detailed Analysis:
  
  1. Deduction of Income-Tax from Dividends Distributed by the Official Liquidator
  The petitioners, contributories of a company in liquidation, challenged the deduction of income-tax from the third dividend proposed by the official liquidator and sought a refund of the 30% deduction made from the second dividend. The official liquidator had deducted income-tax from the second dividend and credited it to the income-tax department. The court ruled that the official liquidator was in error in making this deduction.
  
  2. Classification of Profits Earned During Liquidation as Dividends
  The court examined whether the profits earned by the company during liquidation could be classified as dividends and thus be subject to income-tax deduction at source. It was noted that the company had no accumulated profits at the commencement of liquidation in 1934, and the profits in question were earned during liquidation. The court referred to previous judgments, including the Supreme Court's decision in Dhandhania Kedia & Co. v. Commissioner of Income-tax, which held that profits earned during liquidation are not considered dividends.
  
  3. Applicability of Section 2(22)(c) of the Income-tax Act, 1961
  Section 2(22)(c) defines "dividend" to include any distribution made to shareholders out of the accumulated profits of the company on its liquidation. However, the court clarified that this provision applies to profits accumulated immediately before liquidation, not to profits earned during liquidation. The court emphasized that the legislative history and amendments to this section did not alter this interpretation.
  
  4. Interpretation of "Accumulated Profits" and "Date of Liquidation"
  The court analyzed the terms "accumulated profits" and "date of liquidation" in the context of the Income-tax Act. It concluded that "accumulated profits" refer to profits accumulated up to the date of liquidation, excluding profits earned during liquidation. The "date of liquidation" was interpreted to mean the commencement of winding up, not the final dissolution of the company. The court referred to Explanation 2 of Section 2(22), which clarified that accumulated profits for sub-clause (c) include profits up to the date of liquidation, not beyond.
  
  Conclusion:
  The court directed the official liquidator not to deduct income-tax or super-tax from future dividends to be declared and distributed in respect of the company. The petitioners were advised to seek a refund for the previously deducted amount through appropriate proceedings before the Income-tax Officer. Each party was ordered to bear its own costs.

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• 1965 (2) TMI 30
  
  Issues:
  1. Rectification of share register under section 155 of the Companies Act, 1956.
  2. Dispute over ownership and transfer of shares within a family-owned company.
  3. Bar of limitation in filing the petition.
  4. Complexity of questions of title and maintainability of the petition.
  
  Analysis:
  
  The judgment pertains to an application for the rectification of the share register of a company under section 155 of the Companies Act, 1956. The petitioner claimed ownership of specific shares in the company but discovered discrepancies in the share register, leading to the dispute. The company, a family concern, contended that the petitioner held shares as a benamidar for his father and voluntarily transferred them to other family members. The issues framed included the transfer of shares, compliance with statutory requirements, limitation period, and the complexity of title-related questions.
  
  The court first addressed the issue of maintainability based on the complexity of the title dispute. It was argued that the petitioner's title to the shares was seriously disputed, necessitating a detailed investigation involving conflicting oral and documentary evidence. The court emphasized that section 155 provides a summary remedy, but if complicated questions of fact and law are involved, the matter should be adjudicated in a civil court. Citing precedents, the court highlighted that a separate action would be appropriate for intricate matters, and the summary jurisdiction should not be exercised in such cases.
  
  Referring to previous judgments, the court reiterated that disputed questions of fact should not be resolved summarily under section 155, as they are more suited for a full trial with discovery of documents. Considering the contentious nature of the petitioner's title and the need for a comprehensive examination of facts, the court declined to exercise its power under section 155. Consequently, the petition was deemed not maintainable, and the petitioner was advised to pursue appropriate legal action in a civil court for resolution.
  
  In conclusion, the court dismissed the petition, refrained from awarding costs, and allowed the petitioner to seek redress through the civil court. By emphasizing the need for a detailed examination of disputed facts and the limitations of summary jurisdiction, the judgment underscores the importance of appropriate forums for resolving complex legal disputes related to share ownership and transfers within companies.

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• 1965 (2) TMI 8
  

  Whether, on the facts and in the circumstances of the case, the sums of ₹ 12,68,460, ₹ 4,40,878 and ₹ 6,71,735, or any them, which represents receipts by the assessee-company of its sale proceeds in British India, include any portion of its income in British India ?

  Held that:- Having carefully weighed the pros and cons of the controversy which have been pressed before us on the present occasion, we are not satisfied that a case has been made out to review and revise our decisions in the case of the New Jehangir Mills [1959 (5) TMI 4 - SUPREME Court] and the case of the Petlad Co. Ltd.[1962 (11) TMI 45 - SUPREME COURT] That is why we think that the contention raised by Mr. Palkhivala must be upheld. In the result, the order passed by the High Court is set aside and the matter is sent back to the High Court with a direction that the High Court s

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• 1965 (2) TMI 7
  

  Whether Zamindari Abolition Compensation Bonds issued by the U. P. Government to intermediaries in payment of compensation payable on the basis of their rights under the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950 have to be accepted by the appropriate authorities in payment of the agricultural income-tax due from them?

  Held that:- The fact that the bonds are negotiable does not make them legal tender and does not make it obligatory on anyone, including Government, to accept them in payment of any dues. When the compensation payable to an intermediary has been paid in the form of cash or bonds, that compensation ceases to be payable. Section 6(4) of the Act and rule 8-A of the rules do not, as already stated, provide for the receipt of agricultural income-tax in the form of bonds.

  We are therefore of opinion that the Collector cannot be said to be in error in not accepting the bonds which had been delivered and which were not even cashable at the time, in payment of the arrears of agricultural income-tax payable under the Agricultural Income-tax Act. Allow the appeal, set aside the order of the High Court and restore that of the Collector dated August 24, 1956

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• 1965 (2) TMI 6
  

  Whether the constitutional validity of section 2(6A)(d) Indian Income-tax Act, 1922 can be supported on the ground that it was enacted to prevent evasion of income-tax?

  Whether the said dividends were distributed in the year 1953-54, as the appellant contends, or in the accounting year 1954-55, as the respondent argues?

  Held that:- When there is a factual avoidance of tax, in terms of law, the legislature steps in to amend the income-tax law so that it can catch such an income within the net of taxation. There is, therefore, no inconsistency between a receipt being a capital one under the company law, and by fiction being treated as taxable income under the Income-tax Act.Therefore, as section 2(6A)(d) of the Act embodies a law to prevent evasion of tax, it falls within the ken of entry 54 of List I of Schedule VII to the Government of India Act, 1935.

  We agree with the High Court that the dividends were distributed to the shareholders during the accounting year, i. e., 1954-55. Appeal dismissed.

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• 1965 (2) TMI 5
  

  Sum received by the assessee in consideration of consenting to the assignment of lease by M Ltd., in favour of B Ltd., is not a revenue receipt - Where the source of a sum of money is proved, the question of taxability depends on a consideration of all the circumstances of the case

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• 1965 (2) TMI 4
  

  Whether the customs rebate received by the assessee was liable to be taxed in the hands of the assessee - Whether there is any evidence on the record to justify the finding of the Tribunal that the customs rebate was not received by the assessee on behalf of a third party and it was a revenue receipt of the assessee

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• 1965 (2) TMI 3
  

  Whether, on the facts and in the circumstances of the case, the bonus shares of the face value of Rs. 50,07,500 should be included in the paid-up capital of the assessee within the meaning of that term in pursuance of sub-section (1) of the Explanation to Paragraph D of Part II of the Finance Act, 1956, for the relevant assessment year - Held, no

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• 1965 (2) TMI 2
  
  Issues Involved:
  1. Assessment of agricultural income-tax for the assessment year 1955-56.
  2. Inclusion of receipts from coffee crop delivered to the Coffee Board prior to April 1, 1954, in assessable income.
  3. Deduction of expenses incurred for the production of coffee from the sale value in computing agricultural income.
  
  Detailed Analysis:
  
  1. Assessment of Agricultural Income-Tax for the Assessment Year 1955-56:
  The case pertains to the first assessment year (1955-56) under the Madras Agricultural Income-tax Act. The assessee, Messrs. Beverley Estates Limited, which owns coffee plantations, was assessed on the agricultural income earned from April 1, 1954, to March 31, 1955. The tax was levied on the total agricultural income of the previous year, as defined by the Act. The court emphasized that the income for this period must be ascertained to determine the tax liability.
  
  2. Inclusion of Receipts from Coffee Crop Delivered to the Coffee Board Prior to April 1, 1954:
  The dispute centered on whether the receipts from coffee delivered to the Coffee Board before April 1, 1954, should be included in the assessable income for the year 1955-56. The assessee argued for their exclusion. The court referred to prior decisions, noting that the Appellate Bench had previously held that the date of sale (delivery to the Coffee Board) was the determining factor for tax liability, not the date of receipt. Thus, coffee delivered before April 1, 1954, should not be taxed in the year 1955-56, even if the sale price was realized after April 1, 1954.
  
  3. Deduction of Expenses Incurred for the Production of Coffee:
  The assessee contended that if the receipts from coffee delivered before April 1, 1954, were included in the assessable income, then the expenses incurred for its production should also be deducted to accurately reflect the income. The Appellate Tribunal, however, held that deductions were governed by section 5 of the Act, which only allowed expenses incurred during the previous year (April 1, 1954, to March 31, 1955). Since the production expenses for the coffee in question were incurred prior to this period, they were not deductible. The court upheld this view, stating that the sale value included in the income computation did not allow for production cost deductions under the Act's provisions.
  
  Conclusion:
  The court concluded that the income from coffee delivered to the Coffee Board before April 1, 1954, should not be included in the assessable income for the year 1955-56. Furthermore, the court denied the deduction of production expenses incurred before the previous year, emphasizing that the computation of agricultural income must adhere strictly to the provisions of the Act. The petition was dismissed, with no order as to costs, acknowledging the unique circumstances of the case.

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• 1965 (2) TMI 1
  

  Prayer, for quashing the noticesissued to the petitioner under section 23(2) - petitioner has also prayed for a writ in the nature of prohibition prohibiting the respondents from taking any steps in pursuance of the aforesaid notices or making any orders for assessment in pursuance thereof.

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