COMMISSIONER OF INCOME TAX MADRAS Vs. MADURAI MILLS GO LIMITED

JUDGEMENT

(1.) This appeal on certificate has been filed by the Commissioner of Income-tax against the judgment of Madras High Court whereby that court answered the following question referred to it under Section 66 (1) of the Indian Income Tax Act, 1922 (hereinafter referred to as the Act) in the negative in favour of the assessee respondent:

(2.) The matter relates to assessment year 1961-62. The assessee is a public limited company carrying on the business of manufacture and sale of yarn. The assessee held shares in the following companies as under:

(3.) The High Court while answering the question in the negative held that when a liquidator distributes the assets of a company which has gone into voluntary liquidation, he is performing a legal function and there is no element of sale, transfer, exchange or relinquishment involved in such distribution. The judgment of the High Court is reported in (1969) 74 I.T.R. 623 (Mad).