R DALMIA Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) : The IT Ref. under consideration is concerned with the asst. yr. 1961-62 for which the relevant previous year was the year ending 30th September, 1960. Although a number of questions have been referred to us, basically most of the questions relate to the compulsory acquisition of the Lahore Electric Supply Co. Ltd., which took place before the partition of the country. These questions are related to the interpretation of s. 2(6A) of the Indian IT Act, 1922, because the basic question for determination is whether a loan taken from M/s South Asia Industries (P.) Ltd., by the assessee can be deemed to be a dividend for the purpose of computing the income of the assessee. This question forms the subject-matter of the first six questions referred to us. The remaining questions are concerned with the disallowance of certain interest income and the inclusion of some income arising in favour of the wives of the assessee in his total income under s. 16(3) of the Act.

(2.) BEFORE referring to the essential facts of the case, it may be useful here to set out the questions which have been referred to us. They are : "1. Whether, on the facts and in the circumstances of the case, the compulsory acquisition of the Lahore Electric Supply Undertaking under the Indian Electricity Act, 1910, resulted in a transfer of capital assets within the meaning of s. 12B of the Indian IT Act, 1922 ? 2. If the answer to question No. 1 is in the affirmative, whether, on the facts and in the circumstances of the case, the transfer of the capital asset represented by the undertaking belonging to the company took place any time in the period from April 1, 1946, to March 31, 1948 ?