LIQUIDATORS PURSA LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN this case the petitioners are joint liquidators of Pursa Ltd., an incorporated company which went into voluntary liquidation on the 20th June, 1945. By an order of assessment dated the 21st June, 1947, the INcome-tax Officer, Patna, included in the total income of the petitioners a sum of Rs. 13,05,144 on account of profits on the sale of machinery under section 10(2)(vii) of the INcome-tax Act. He also added a further sum of Rs. 15,882 as profits on the sale of stores. The assessment was affirmed on appeal by the Appellate Assistant Commissioner and also by the INcome-tax Appellate Tribunal. At the instance of the petitioners the Tribunal stated a case the High Court on the following two question :

(2.) WAS the profit of Rs. 15,882 on the sale of stores of the factory taxable under the Income-tax Act in the circumstances of this cas ?"

(3.) FOR these reasons we hold that the order of the Commissioner of Income-tax dated the 8th October, 1955, refusing to pay interest to the petitioners is illegal and ultra and must be quashed by a writ in the nature of certiorari. We further direct that the Commissioner of Income-tax should reconsider the question of interest and decide the matter in accordance with law.