1995 (11) TMI 86

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.... managing agent. The firm was carrying on business on acquisition of an estate known as Kurumber Betta Estate situated at Cherumully village in Gudallur Taluk, Nilgiri District. One of the partners, Shri Chenniah, expired in 1971. He happened to be indebted to the Income-tax Department and the property of the partnership became the subject-matter of an order of attachment by the Tax Recovery Officer, Bangalore, to the extent of share of Shri Chenniah in the partnership property and profits thereof in regard to tax arrears of Chenniah amounting Rs. 7,41,678.10. It is in this above process of tax recovery of Shri Chenniah, that the present petitioner intimated to the Tax Recovery Officer that one-third of the sale proceeds would be remitte....

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.... S. Chenniah in the proceeds of the estate--whether it is one-third of the total sale price, or only one-third of the balance after deducting the liabilities of the estate--the DD in whole or in part can be appropriated." It would be seen thereafter that by a communication dated March 12, 1990, the petitioner is informed that the above amount of Rs. 11,67,000 was appropriated on February 17, 1989, towards the arrears of income-tax/wealth-tax dues of the late Shri S. Chenniah, and not from July 6, 1987--the day on which the amount was deposited. It appears that this step became a subject-matter of challenge in Original Petition No. 9337 of 1990 (Kurumber Betta Estate v. ITO (Fourth) [1992] 197 ITR 499 (Ker)) as one of the aspects. Refe....

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....act that in any nature or capacity the amount lying in deposit with the Department and it is deposited in pursuance of a call in regard thereto as referred to above by the communication dated March 14, 1987. In the counter it is urged that the very nature explained and recorded as regards the deposit of the amount of Rs. 11,67,000 has to be found from exhibit P-5 which would show that the amount was kept in deposit for its appropriation at a future date and it continued to bear the same character till February 17, 1989. It was also submitted that in fact the amount could not be the subject-matter of a refund. It must be stated that although learned counsel urged that this could not be an amount being the subject-matter of a refund, th....