TMI Blog1984 (11) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts and in the circumstances of the case, the amount of Rs. 14,560 was assessable in the hands of the assessee under the head 'Capital gains' ?" In Tax Case No. 12 of 1974, the question of law referred for the opinion of this court is as below : " Whether, on the facts and in the circumstances of the case, the amount of Rs. 30,900 was assessable in the hands of the assessee under the head 'Capital gains'? " Tax Case No. 8 of 1974 The assessment year in question is 1964-65. The original assessment for this assessment year was made determining a capital gain of Rs. 1,640 on properties received from M/s. Ganpati Properties (P) Ltd. The assessee was one of the shareholders of M/s. Ganpati Properties Ltd. On voluntary liquidation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner, however, following the decision in an earlier case of a shareholder, vacated the reassessment order and directed that the value of the capital gain be taken at the same figure which was taken in the original assessment. The Department went before the Appellate Tribunal and the Tribunal following the decision in the case of CIT v. R., M. Amin [1971] 82 ITR 194 (Guj), held that there was no transfer of capital asset in this case and the Tribunal, therefore, held that the Appellate Assistant Commissioner rightly set aside the higher valuation taken in the reassessment for the computation of capital gain. The departmental appeal was dismissed by the Tribunal. The Department thereafter filed an application before the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but in the hands of the transferor. The Appellate Assistant Commissioner further held that the provisions of section 52(1) of the Act were not applicable in the instant case and the assessee had not transferred any asset and was only a recipient. The Appellate Assistant Commissioner deleted the addition of Rs. 30,900. The Department thereafter went before the Tribunal. The Tribunal agreed with the Appellate Assistant Commissioner and held that the provisions of section 52(1) were not attracted in the instant case and also held that the assessee had not transferred any asset but had merely acquired an asset in this case. The Tribunal held that the assessee, in the instant case, had received these assets on the liquidation of the company o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax Department contended that the Tribunal in both the cases had wrongly relied upon the case of CIT v. R. M. Amin [1971] 82 ITR 194 (Guj) and contended that the facts of that case were clearly distinguishable and the dictum laid down in that case could not be applied in the instant cases. The learned senior standing counsel for the Department further contended that in the instant cases, the assessees, on the facts of the present cases, were clearly chargeable to capital gains not under the general provisions of section 45 but under the specific provisions of section 46(2) of the Act. There is enough force in the submission advanced by the learned counsel for the Department as would appear hereafter. On the other hand, the learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax on any capital gain in respect of such transaction. However, section 46(2) imposes a liability on the shareholder and the shareholder becomes chargeable to income-tax under the head " Capital gains " in respect of money received or the market value of other assets received by him on the date of distribution. Section 48 prescribes the mode of computation of income-tax chargeable under the head " Capital gains ". The computation of income under section 48 has to be done by the Income-tax Officer. It is inherent in the exercise of that power to determine the full value of the consideration as provided in section 46(2). The Income-tax Officer has a duty to determine the market value of the assets received by the shareholder on liquidation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... requires" and thus in section 2(24) when capital gains are sought to be included, it must, on correct construction, mean that all "Capital gains " which are sought to be charged to income-tax under the said heading are included. An identical question as involved in the instant tax cases was considered in the case of CIT v. Vijoy Kumar Budhia [1975] 100 ITR 380 (Pat) and there too the Tribunal had relied upon the case of CIT v. R.M Amin [1971] 82 ITR 194 (Guj). This court in the case of CIT v. Vijoy Kumar Budhia [1975] 100 ITR 380 (Pat) considered the case reported in 82 ITR 194 and held that the Tribunal had wrongly relied upon the principles laid down in that case (i.e., 82 ITR 194). On the legal view, as stated above, I hold that the r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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