TaxTMI 
TaxTMI 
1988 (5) TMI 88
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....ance in the respective years to the assessee while completing the assessment for those years. Subsequently, the ITO withdrew the development rebate and investment allowance by his orders dt. 10th Sept., 1984 for the asst. yrs. 1973-74 to 1976-77 and 1979-80 and by his order dt. 17th Dec., 1984 for the asst. yr. 1978-79. The ITO invoked the provisions of s. 34(3)(b) of the IT Act for withdrawing the development rebate because he was of the view that the plant or machinery in respect of which development rebate had been allowed to the assessee had charged hands within the statutory period. Similarly, he withdrew the investment allowance for the last two asst. yrs. 1978-79 and 1979-80. 2. When the matter came before us on the earlier occasion, we had by our remand order dt. 16th Sept., 1986 directed the ITO to submit a remand report after taking into account the various facts and circumstances as set out in para 7 of our remand order, which is quoted below: "For deciding this issue it is necessary to identify the property which according to the Department was the subject of transfer. The ITO would therefore first draw up a list of the property which was the subject a of transfer....
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....s society at the level of District and ultimately as State Federation of Producers' Unions. As a result of this decision taken by the State Government, it issued a G.O. No. 555 wherein it ordered that the assets and liabilities of Diary Development Corporation would stand transferred to the Tamil Nadu Co-operative Milk Producers' Federation. In view of this G.O. the Tamil Nadu Diary Development Corporation also passed a resolution on 30th Dec., 1980 stating the Government's decision that its assets and liabilities would be transferred to Tamil Nadu Co-operative Milk Producers' Federation w.e.f. 1st Feb., 1981. In the resolution dt. 10th Dec., 1981 passed by Tamil Nadu Co-operative Milk Producers Federation Limited they agreed for taking over the assets and liabilities of Tamil Nadu Corporation Limited as per particulars noted here below: Rs. Value of assets transferred 17,87,16,350 Value of all liabilities 15,58,79,364 Net Amount payable by Tamilnadu Co-operative Milk Producers' Federation 2,28,36,986 Subsequently, as per G.O. No. 2424 dt. 10th Dec., 1982 issued by Government of Tamil Nadu the value of assets and liabilities transferred by Tamil Na....
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....n in favour of the Federation with reference to immovable properties transferred, namely, and buildings, and that these immovable properties were transferred to the Federation by the Corporation by virtue of the G.O. issued by the State Government referred to above. (v) The ITO further found that possession of all these assets was also given by the Corporation to the Federation. (vi) Therefore, when the above facts were taken into consideration, the ITO was of the view that the transfer of all movable assets, namely, plant and machinery, vehicles and other items other than land and buildings stood transferred to the Federation as on 1st Feb., 1981 and there could be no doubt about this transfer. 5. Adverting to the later G.O. No. 1477 dt. 30th July, 1984 issued by thr Tamil Nadu Government, the ITO held that this G.O. was mainly intended for satisfying the provisions of s. 560 of the Companies Act and for facilitating liquidation of the Corporation only. In support of this conclusion, the ITO relied on extracts from paragraphs 2 to 8 of the G.O. He particularly relied on Para 5 which expressly referred to the transfer and taking over of the assets by the Federation from th....
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.... a lawful manner and in accordance with the procedure known to law. He therefore argued that the withdrawal of these allowance of development rebate and investment allowance by the departmental authorities was not justified and that their orders should be cancelled. 7. Shri. P.C. Mohanty, the learned departmental representative submitted that the Tamil Nadu Government was only a party before the Tribunal just like any other big corporate body and therefore it had to fulfil all the requirements of law contained in the provisions of the IT Act. Shri Mohanty submitted that we have to infer the intention of the parties as on 31st Jan., 1981 with reference to the facts that existed on 31st Jan., 1981 as such intention cannot exist in the abstract. He next submitted that if the intention of the parties could be gathered with reference to the materials as on 31st Jan., 1981, it is next to be decided whether there was any change of intention on the part of the State Government. Easing himself on the G.O. Np. 1477 dt. 30th July, 1984 Shri Mohanty argued that this G.O. clearly spelt out the intention of the Government when they ordered the transfer of the assets from the Corporation to th....
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....he land or building they did not become part off the immovable property, as for example in the case of a built-in cupboard in a building. He therefore, argued that for transfer of these movable no registered deed was necessary and that they could be taken over by the Government by passing a G.O. as was done by them in the present case. G.O. as was done by them in the present case. In support of these submissions, the learned counsel relied on Perumar Naicker vs. Ramaswami Kone AIR 1969 Mad 346, South Indian Bank Ltd. Case AIR 1976 Mad 215 and State Bank of Mysore vs. Official Liquidator 58 Com Cases 609 (Karn). 9. We have carefully considered the submissions urged on both sides in the light of the materials placed before us. 10. From the facts placed before us, as contained in the various Government Orders and the annual accounts of the Corporation and the Federation, it is clear that the entire assets and liabilities of the Corporation were transferred from the Corporation to the Federation as per the decision of the Government of Tamil Nadu. In note Nos. 1 and 2 of Schedule 9 which contain the notes on accounts of the 9th annual report of the Corporation, it is stated as fo....
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....ave already referred to the ownership of the shares of the Corporation as well as the Federation by the Tamilnadu Government should also be kept in view and that the Directors of the Corporation were to carry out in terms of its memorandum and objects the directions of the State Government. In this connection, we would refer to three articles in the Articles of Association of the corporation, namely, Arts. 73,74, and 122: "Number of Directors: 73(a) The Governor shall from time to time determine the number of Directors of the Company which shall not be less than two and shall not exceed ten. The Directors are not required to hold any qualification shares. (b) The following shall be the first directors of the Company: (1) Thiru P. Sabanayagam, IAS Chief Secretary to Government of Tamilnadu Chairman. (2) Thiru Ramachander, IAS, Secretary to Government, Food Department-Director. (3) Thiru S. Venkitaramnan, IAS, Secretary to Government, finance Department-Director. (4) Thiru P.N. Vedanarayanan, IAS, Secretary to Government, Agriculture Department-Director. (5)Thiru N. Harishankar, IAS, the Commissioner for Milk Production and Dairy Development-Director. (6) M....
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.... "Ref: 1. G.O. Ms. No. 2424 Agriculture, dt. 10th Dec., 1982. 2. G.O Ms. No. 1477, Agriculture, dt. 30th July, 1984. 3. From the Managing Director, Tamilnadu Co-operative Milk Producers' federation Ltd. Madras-51 letter No. 14865/Acfts/II/I/85 dt. 5th May, 1987. The following amendment is issued to the G.O. Ms. No. 1477, Agriculture, dt. 30th July, 1984: AMENDMENT In partial modification of the orders issued in G.O. Ms. No. 1477, Agriculture, dt. 30th July, 1984, the Government now direct that the intention of the Government in issuing orders in the G.O second cited is that the transfer of assets and liabilities from the Tamilnadu Dairy Development Corporation to Tamilnadu Co-operative Milk Producers' Federation Ltd. has been effected through the Government as on 1st Feb., 1981 since this order has been issued in partial modification of the orders already issued in the G.O. first cited. 2. This letter issues with the concurrence of the Finance Department vide its U.O. No. 1288/PPE/87-1 dt. 30th July, 1987." In this letter dt. 9th Nov., 1987, the Deputy Secretary to the Government moved the following clarification to the Tribunal: "This is to clarity that the....