TaxTMI 
TaxTMI 
2017 (9) TMI 479
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....ZIFDAR, CHIEF JUSTICE This is an appeal against the order and judgment of the learned Company Judge in an application filed on behalf of the company that is sought to be wound up. The petition is filed for winding up the company inter-alia on the ground that it is unable to pay its debts. By an order dated 28.08.1997 the company petition was admitted and was ordered to be advertised. In view of the nature of the impugned order, it is necessary to note that the company has not been ordered to be wound up. 2. The question that was raised in the company application in which the impugned order was passed is whether the sale proceeds of the assets of the company in liquidation under the orders of the Company Court are amenable to capital gain....
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....er the orders of the Company Court in respect of the company in liquidation, the sale proceeds are not amenable to capital gains. The learned Judge noticed various provisions of the Companies Act, 1956 and the Income Tax Act. 5. It is important to note that throughout the judgment the learned Judge has referred to the company as being 'in liquidation' and that it is the asset of the company 'in liquidation' that was sold. The learned Judge was obviously aware of the fact that the company had not been ordered to be wound up. We do not think that the words 'in liquidation' used by the learned Judge indicate that the learned Judge was under a misapprehension that the company had been ordered to be wound up. That is the reason why the rights a....
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....s is acquired after the relevant date to get their share from the resources of the company in liquidation i.e. after the claims of the workers and that of the creditors is satisfied." These observations indicate that the learned Judge contemplated the rights and liabilities being determined finally only hereafter. 6. It was contended before us that the learned Judge positively held that the Company Court cannot determine the liability of the company under the Income Tax Act. The learned Judge has referred to this contention and dealt with the role of the Company Court in such cases. The learned Judge has also referred to various authorities on this issue. The grievance is that the learned Judge has held that the Company Court cannot deter....
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....34,44,615/- deposited under the order of this Court shall be returned to this Court to satisfy the liability of the workmen and creditors secured and unsecured and in the eventuality of the liability of the workmen and the creditors secured and unsecured stands largely satisfied, then this amount shall be unhesitatingly given to the share of the revenue." 7. The views are by no means conclusive. They are only tentative and rightly so as the order is passed only at the interim stage. The proceedings before the Company Court and before the authorities are pending. They may proceed. The issue whether the findings in the assessment proceedings bind the Company Court or the Official Liquidator or not can be decided subsequently. If the answer i....
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....15 has been filed by the Income Tax Department insofar as the learned Judge has directed the department to return an amount of about Rs. 18 crores. As far as the observations regarding the priorities are concerned, the same would be decided by the learned Company Judge subsequently alongwith other issues referred to above. It is not necessary to deal with the issue regarding the return of a sum of Rs. 18 crores in view of the statements made by the parties before us. 10. Mr. Chandok rightly agreed that the order of the learned Single Judge be modified by permitting the Income Tax Department to retain the amount of about Rs. 18 crores as that would safeguard the company in the event of it held to be liable to capital gains tax. ....