1969 (2) TMI 20

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.... for the winding-up of the company. By 11th July, 1955, the liquidators had paid to the assessee a sum of Rs. 2,80,400 as dividends. This reference arises out of the assessment for the assessment year 1957-58, the previous year being the period from April 1, 1956, to March 31, 1957. On the 26th September, 1936, during the course of the previous year relevant for the present assessment, the assessee received a further sum of Rs. 21,100 from the liquidators as refund of capital at the rate of 50 nP. per share on 42,200 shares mentioned hereinbefore. The question is whether the said sum received by the assessee on the 26th September, 1956, is assessable as capital gains under section 12B(1) of the Indian Income-tax Act, 1922. Section 12B(1), ....

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.... of the shareholders in its shares. When an asset or any right therein is extinguished in the hands of a person, it is not correct to say that such person had relinquished it. It may be noted here that in the Income-tax Act, 1961, Parliament, obviously, alive to this distinction, enlarged the scope of section 45 for the assessment of any profits or gains arising from the 'transfer' of capital asset by defining in section 2(47) the word ' transfer' to include' the sale or relinquishment of the asset or the extinguishment of any rights therein or the compulsory acquisition thereof under any law. ' " In that view of the matter the Tribunal was unable to accept the proposition that the said sum received by the assessee attracted the provisions....