Dipak Kumar Sen, J. - (1.) The Shahdara (Delhi) Saharanpur Light Railway Company Ltd. went into voluntary liquidation on December 10, 1970, as a solvent company. The liquidation progressed to a considerable extent. Most of the assets of the company have been realised by the liquidators except a few claims remaining outstanding to which we shall advert later. The creditors whose claims were due as on the date of the liquidation which were admitted by the liquidator have all been paid in full. 40% of the capital has been returned to the contributories. Two claims of the company against the State Railways aggregating to Rs. 1,14,614 and a claim for damages against the Union of India for Rs. 35 lakhs for which a suit has been filed in this court have remained pending.
(2.) According to the liquidators, the claims pending against the company which are admitted aggregate to Rs. 1,48,179 and claims which are disputed aggregate to Rs. 2,61,762. The admitted claims of the State Railways for Rs. 1,44,901 are stated to be subject to set off by the claims of the company against the State Railways for Rs. 1,14,250.
(3.) In the course of liquidation, the liquidators have sold the assets of the company. The Income-tax Officer has assessed the company in liquidation through the liquidators for the years 1972-73 to 1982-83. The assessments were on the capital gains which are stated to have been assessed in the hands of the liquidator by reason of the sale of the assets of the company. The liquidators have disputed their liability to be assessed altogether and contend that, in any event, capital gains cannot be assessed where the assets of the company are sold in liquidation proceedings. Appeals were preferred by the liquidators against the assessments made by the Income-tax Officer up to the Income-tax Appellate Tribunal. The contentions of the liquidators have been rejected by the Tribunal and the assessments have been confirmed. Presently, the income-tax demands aggregate to Rs. 73,41,296. The said demands consist of tax-assessed, interest and penalty.;