NDLI: The Commissioner of Income-tax, Madras Vs. Urmila Ramesh

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Income Tax Act 1961: Ss. 2(22)(c) 32(1)(iii) and 41(2)
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Indian Income-tax Act, 1922 (11 of 1922)
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Dismissed
Headnote	Income Tax Act, 1961 :Ss. 2(22)(c), 32(1)(iii) and 41 (2)-Assessees-shareholders of company-Liquidation-Amount realized on sale of assets in excess of written down value but less than purchase price-Distribution of dividends to shareholders-Assessment order treating the sale amount as "accumulated profit" and its distribution to shareholders as "deemed dividend"-Validity of-Held, amount received by the company on sale of assets does not constitute" accumulated profit"-Return of capital on sale of assets is not capable of being capitalised and hence is not "deemed dividend"-Income Tax Act, 1922-Section 10(2)(vii). Section 2(22)(c)- "accumulated profit"-Nature and scope ofS.41(2)-Whether contains any legal fiction as regards income of an assessee-Held, yes. Respondents-assesses were share-holders of a private Limited Company which went into voluntary Liquidation. After sale of its assets, the liquidator distributed the dividends to the share-holders. The Income Tax Officer by determining the accumulated profits of the company taxable under Section 41(2) of the Income Tax Act, 1961, passed assessment orders treating the dividends distributed as income of the respective share-holder under Section 2(22)(c) of the Act. The respondents-assesses' appeals against the said assessment orders were allowed by Appellate Assistant Commissioner and further upheld by Income Tax Appellate Tribunal. On reference, High Court held that the profits assessed under Section 41(2) of the Act could not form part of the accumulated profits for the purpose of Section 2(22)(c) of the Act. Hence, the present appeals.The contention of the appellant-Revenue was that if the amount for which the assets were sold, exceeds the written down value, then the amount which is assessed under Section 41(2) of the Act represents accumulated profits .and on its distribution amongst the share-holders it should be assessed as dividend. The contention of respondents-assessees was that the amount realized by the liquidator on the sale of the assets admittedly being less than the purchase price, it only represented the return of capital and the excess of realization over the written down could not be regarded as profit under section 22(2)(c) of the Act; it is only by legal fiction that the excess amount received by the official liquidator was deemed to be income and taxed by virtue of provisions of Sec•ion 41(2) of the Act and cannot be regarded as profit or capital gain.
Judge	Honble Mr. Justice B.N. Kirpal
Neutral Citation	1998 INSC 40
Petitioner	The Commissioner Of Income-tax, Madras
Respondent	Urmila Ramesh
SCR	[1998] 1 S.C.R. 323
Judgement Date	1998-01-23
Case Number	2141

Sl.	Authority	Responsibilities	Communication Details
1	Ministry of Education (GoI), Department of Higher Education	Sanctioning Authority	https://www.education.gov.in/ict-initiatives
2	Indian Institute of Technology Kharagpur	Host Institute of the Project: The host institute of the project is responsible for providing infrastructure support and hosting the project	https://www.iitkgp.ac.in
3	National Digital Library of India Office, Indian Institute of Technology Kharagpur	The administrative and infrastructural headquarters of the project	Dr. B. Sutradhar bsutra@ndl.gov.in
4	Project PI / Joint PI	Principal Investigator and Joint Principal Investigators of the project	Dr. B. Sutradhar bsutra@ndl.gov.in Prof. Saswat Chakrabarti will be added soon
5	Website/Portal (Helpdesk)	Queries regarding NDLI and its services	support@ndl.gov.in
6	Contents and Copyright Issues	Queries related to content curation and copyright issues	content@ndl.gov.in
7	National Digital Library of India Club (NDLI Club)	Queries related to NDLI Club formation, support, user awareness program, seminar/symposium, collaboration, social media, promotion, and outreach	clubsupport@ndl.gov.in
8	Digital Preservation Centre (DPC)	Assistance with digitizing and archiving copyright-free printed books	dpc@ndl.gov.in
9	IDR Setup or Support	Queries related to establishment and support of Institutional Digital Repository (IDR) and IDR workshops	idr@ndl.gov.in

The Commissioner of Income-tax, Madras Vs. Urmila Ramesh

Please Log-in to view this content

The Commissioner of Income-tax, Madras Vs. Urmila Ramesh Etc.

Commissioner of Income Tax, Rajkot Vs. M/s Gujarat Siddhi Cement Ltd.

Ramesh Narain Saxena and Ors. Vs. Commissioner of Income Tax, New Delhi

The Commissioner Vs. Mahindra and Mahindra Ltd. Thrg M.d.

Commissioner of Income Tax, Tamil Nadu Ii, Madras Vs. Madras Auto Service (p) Ltd.

Thiru Arooran Sugars Ltd., Madras Vs. Commissioner of Income Tax, Madras

R.m. Arunachalam Etc Vs. Commissioner of Income Tax, Madras

The Commissioner of Income-tax, Madras Vs. M.v. Murugappan and Ors.

G.k. Choksi & Company Vs. Commissioner of Income Tax, Gujarat

The Commissioner of Income-tax, Madras Vs. Urmila Ramesh

The Commissioner of Income-tax, Madras Vs. Urmila Ramesh

Please Log-in to view this content

Similar Documents

The Commissioner of Income-tax, Madras Vs. Urmila Ramesh Etc.

Commissioner of Income Tax, Rajkot Vs. M/s Gujarat Siddhi Cement Ltd.

Ramesh Narain Saxena and Ors. Vs. Commissioner of Income Tax, New Delhi

The Commissioner Vs. Mahindra and Mahindra Ltd. Thrg M.d.

Commissioner of Income Tax, Tamil Nadu Ii, Madras Vs. Madras Auto Service (p) Ltd.

Thiru Arooran Sugars Ltd., Madras Vs. Commissioner of Income Tax, Madras

R.m. Arunachalam Etc Vs. Commissioner of Income Tax, Madras

The Commissioner of Income-tax, Madras Vs. M.v. Murugappan and Ors.

G.k. Choksi & Company Vs. Commissioner of Income Tax, Gujarat

The Commissioner of Income-tax, Madras Vs. Urmila Ramesh