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TMI Blog1970 (10) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... respect to the income of the company in liquidation derived in the course of the winding-up. In the course of winding-up of the company in liquidation, large sums of money came into the hands of the liquidator which could not be immediately applied for distribution of dividends to the creditors. The result was that he had to invest the same pursuant to the relative provisions of the Companies (Court) Rules. The investments were mostly by way of bank deposits which earned interest in the course of six years from 1960-61 to 1965-66 amounting to Rs. 1,95,364.05. The auditors, Messrs. B. K. Ramadhyani and Company, in their report dated March 3, 1966, observed that the above amounts of interest received by the liquidator would attract liabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany judge has rightly not been challenged in this appeal. In regard to the second contention, the learned company judge held that it is the duty of the court to see that all the liabilities of the company are properly met in accordance with the provisions of the law and that the liability to income-tax is one of the liabilities which the court is expected to provide for in the course of winding up, that the duties of the " principal officer " of the company after the winding-up are got performed by the court through the liquidator in the light of the special provisions of the Companies Act and that the Income-tax Act substitutes him for the if principal officer ". The question whether the liquidator answers the definition of the term " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Rajashekharamurthy, the learned counsel for the respondent, submitted that the liquidator of a company could be regarded as either the manager or the agent of the company in liquidation. In support of his contention, Sri Rajashekharamurthy relied on the decision in Commissioner of Income-tax v. Official Liquidator of the Agra Spinning and Weaving Mills Co. Ltd. In the said case, after the company in question was ordered to be compulsorily wound-up, two advocates of the court were appointed official liquidators who, in the interest of the company, were permitted to carry on the business of the company. The question arose whether the company in respect of the profits earned in the course of winding-up was liable to income-tax. One of the q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding the power to do such things as may be necessary for winding-up the affairs of the company and distributing its assets. The liquidator appointed in a members' winding up is merely an agent of the company to administer the property of the company for purposes prescribed by the statute. In distributing the assets including accumulated profits, the liquidator acts merely as an agent or administrator for and on behalf of the company. " (The underlining is ours). In Knowles v. Scott Romer J. has stated that, in his view, a voluntary liquidator is more rightly described as the agent of the company. In Palmer's Company Law, twenty-first edition, at page 754, the position of a liquidat or in winding up by court has been stated as that of an a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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