COMMISSIONER OF INCOME TAX Vs. VIJOY KUMAR BUDHIA

JUDGEMENT

(1.) THIS reference under Section 256(1) of the Income-tax Act, 1961 (hereinafter called " the Act "), made by the Income-tax Appellate Tribunal, Patna Bench, demonstrates how some cases including the present one, which have come to my knowledge, are not properly handled at the hands of the departmental authorities or representatives or when the case goes before the Tribunal. As I proceed to state the facts of the case and the points involved in this reference, there will be sufficient warrant for the remark which I have just made in the beginning.

(2.) THE assessee, Shri Vijoy Kumar Budhia of Ranchi, has been assessed under Section 143(3) of the Act as an individual. He was a shareholder in a private limited company known as Ganpati Properties (P.) Ltd., Ranchi. THE company went into voluntary liquidation. THE voluntary liquidator valued the company's property situated at Patna at Rs. 1,53,000. THE assessee received 83/510ths share in the said property of the company. THE value of his share, therefore, came to Rs. 24,900. THE Income-tax Officer found that the value of the property assessed by the liquidator was highly inadequate. He, accordingly, assessed the market value of the property of the company at Rs. 4,50,000. Thus, the value of the share of the assessee in the property of the company distributed to, and received by, him was determined at Rs. 73,235. THE assessee's stand that he was not chargeable for income from any capital gain on account of his receipt of the company's property was not accepted by the Income-tax Officer. He took the value of the company's property at Rs. 1,53,000 as prevailing on January 1, 1954. Deducting the said value from the market value of Rs. 4,50,000, the capital gain in the hands of the assessee was determined at Rs. 48,335, i.e., 83/510ths share in the sum of Rs. 2,97,000. A copy of the order of the Income-tax Officer is annexure " A " to the statement of the case and forms part of it.

(3.) THE Tribunal in paragraph 6 of the statement of the case has stated that questions of law referred by the Additional Commissioner of Income-tax do not arise but the questions of law which emerge out of the finding of the Tribunal are :