TMI Blog1976 (11) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... adurai shares, which were obtained by the two assessees in specie in a voluntary winding up in respect of their original shareholdings in that company, become of their ownership ; whether they become of their ownership on the date of the voluntary liquidation or the date when these shares are actually handed over to the assessees or when they are actually transferred to their names in the register of shares of the company of which the shares in specie are given to them. The short facts giving rise to the question are these : The two assessees, Mrs. D. M. Turner and Mrs. P. M. Gamble, were shareholders in a company called Harveys Private Ltd., each holding 1,000 shares. It appears that this company was possessed of several items of assets ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the liquidator to devise a scheme of distribution of the assets of the company among the creditors and members and to divide among the members the assets available for distribution, in specie, either in whole or in part, in a suitable manner. Pursuant to this resolution, the liquidator framed a scheme of distribution of the assets in specie. The assessees, inter alia, got from the liquidator 3,000 shares of Madurai each. In the assessment of the assessee for the assessment year 1961-62, corresponding to the accounting period being the year ending March 31, 1961, the Income-tax Officer considered the question of capital gains said to have been made by these assessees in respect of this distribution. According to the assessees, the differenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the Appellate Assistant Commissioner. At the instance of the Commissioner of Income-tax, Bombay City I, the question mentioned at the commencement of this judgment has been referred to us for determination. Mr. Joshi, appearing for the revenue, has contended before us that though the Harveys company was taken into voluntary liquidation as the members' winding up by a resolution that was passed on December 19, 1959, the shares of Madurai Mills in specie were actually handed over to the assessees by the liquidator on October 17, 1960, and that the assessees' names were put on the register of Madura Mills Company Ltd. only on October 31, 1960, and that, therefore, either October 17, 1960, or October 31, 1960, should be taken to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eting was actually convened on December 19, 1959, where such resolutions were passed winding up the company as members' winding up in accordance with section 484(1)(b) of the Companies Act and appointing Mr. Krishna Rao, chartered accountant, as a liquidator of the company. It is, therefore, clear that the winding up of Harveys Private Ltd. must be deemed to have commenced on December 19, 1959, and it would be on that date that all the members of Harveys Private Ltd. would be entitled to get in distribution of the assets of the company either money or particular assets in specie as might be decided upon by the liquidator. While narrating the facts we have stated that article 110 of the articles of association of Harveys Private Ltd. provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ell as the Reserve Bank of India, that the shares were actually transferred to the names of the two assessees on October 31, 1960. It will be significant to mention, however, that dividend which had in the meantime been declared by the Madura Mills after December 19, 1959, was also passed on by the liquidator to the two assessees since the shares had been given to the two assessees in the distribution-cum-dividend. Having regard to the provisions of section 486 of the Companies Act, and having regard to the fact that the resolution for voluntary winding up of Harveys Private Ltd. passed on December 19, 1959, and further having regard to the fact that even in the scheme of arrangement, the distribution of assets in specie was to be effective ..... X X X X Extracts X X X X X X X X Extracts X X X X
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