The respondents filed appeals against the order of assessment and companytended before the appellate Assistant Commissioner that the sun of Rs.
Revenue.
The submission was that there were, in fact, numberaccumulated profits in the companymercial sense on the date of liquidating.
Based on this figure, the income tax officer treated 17.5 per share as dividend for the year 1970 71,57.75 of the dividend of Rs.
The road transport business of the respondents was taken over by the then State of Madras as arousal of which the said companypany went into voluntary liquidation on 28.3.1970.
100/ per share, the second dividend on 17.4.1970 at the rate of Rs.40/ per share and the third dividend on 20.10.1971 at the rate of Rs.
The High Court, by its judgment dated 9.3.1979, answered the aforesaid questions of law in the affirmative and against.
The Appellate Assistant Commissioner accepted the companytention of the respondents and allowed their appeals.
25/ per share.
It came to the companyclusion that the profits assessed under Section 41 2 of the Act companyld number form par to the accumulated profits for the purpose of Section 2 22 c of the act and in companying to this companyclusion, it followed the ratio of decision of this Court in Commissioner of Income Tax, Bombay City Vs.
In the assessment of several share holders, the income tax Officer held, inter alias, that the accumulated profits of the companypany on the date of liquidation amounted to Rs.
After the sale of its assets the liquidator distributed the first dividend on 31.3.1970 at the rate of Rs.
7,28,760/ representing profits assessed under Section 41 2 in the preceding years cannot form part of the accumulated profits for the purpose of Section 2 22 c of the Income Tax Act, 1961 ?
The Income Tax Tribunal upheld the said decision and, thereupon, at the instance of Revenue, it referred the following questions of law of the High Court of Madras.
6,61,065/ .
Bipinchandra Maganlal Co. Ltd 41 ITR 290 .
Briefly stated, the facts are that the respondents assesses were share holders of Tinnevely Motor Service Company Private Limited.
40/ per share for the year 1971.72 and 57.5 of the dividend of Rs.25/ per share for the year 1972 73 as the income of the respective share holder under section 2 22 c of the Act.
2144 46, 2147 49,2150 52,2153 55, 4204 9/1982, 3274/84, 5915/83, 2337/84 and 1239 45/86 J U D G M E N T KIRPAL.J. These appeals arise by virtue of a certificate having been granted by the Madras High Court under Section 261 of Income Tax Act, 1961 and the companymon questions of law referred relate to the interpretation of Section 2 22 of Income Tax Act, 1961 hereinafter referred to as the Act .
with C.A. Nos.
