1953 (8) TMI 25

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....he profit realised by the sale of that portion of the buildings which was used for the assessee's business was exempt from capital gains tax under the second proviso to Section 12B(1) of the Act. The statement of the case by the Income-tax Appellate Tribunal sets out fully the facts relevant for the decision of the two questions. On 25th March, 1947, the directors resolved to liquidate the company and a General Body Meeting was held on 31st March, 1947. By a special resolution of the company, the company went into voluntary liquidation and a liquidator was appointed. The capital assets of the company were then sold by the liquidator to a firm of 17 partners. The total sum realised by the sales was Rs. 2,10,000 made up of Rs. 50,000, ....

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..... In our opinion, however, the language of the two provisos is clear and does not admit of any doubt. We are inclined to agree with the view taken by the Department and the Appellate Tribunal regarding the interpretation of the two provisos. The first question referred to us relates to the construction of the third proviso. The exemptions contained in this proviso may be classed under two heads : -(i) Transfer of capital assets by reason of compulsory acquisition of property under the law relating to the acquisition and transfer by way of an irrevocable trust; (ii) Distribution of capital assets at a partition of a Hindu undivided family, or on the dissolution of a firm or other association of persons, or at the liquidation of a company, or....

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....ny. To accept the contention urged on behalf of the assessee, one has to rewrite the section so as to mean any transfer on the occasion of the liquidation of a company, for which, we think, there is no justification as, in our opinion, the language of the section is unambiguous. It is no doubt true that it may not be wholly appropriate to describe the property given under a deed of gift as distribution under it, but there may be cases where even under a gift there may be such distribution. The fact that, in the case of an irrevocable trust, the word "transfer" is used is, in our opinion, a clear indication that the expression "any distribution of capital assets" would govern not only partition but also dissolution and liquidation. What the ....