CiteTEXT
...transfer took place.”Section 46 which pertains to capital gains on distribution of assets by companies in liquidation reads as under:“46. Capital gains on dis.... We are not impressed by the argument of Mr Desai that Section 46(2) does not create liability of a shareholder to pay tax on capital gains which liability, according to the learned counsel, arises because of Sect...shareholders on the distribution of assets by a company in liquidation. But for that sub-section, as already mentioned, it would have been difficult to levy tax on capital gains to the ...
...shareholder by purchase of the share does not acquire any interst in the assets 'of the company till after the company is wound up. The position of a shareholder of a ...contention that the shareholder acquires any interest in the assets of the company. The use of the word 'assets' in the passage quoted above cannot be exploited to warrant the inference that a...shareholder, on investing money in the purchase of shares, becomes entitled to the assets of the company and has any share in the property of the company. A shareholder has got no interes...
...changes from time to time and various amendments have been made both in the 1922 Act as also in the 1961 Act. We shall do well to quote all the sub-clauses (a) to (e) of Section 2(6-A) of the 1922 Act. They read as...law. On the capitalisation of the profits they cease to be profits in the hands of the company. The nature of the assets is changed although it does not make any difference in the total assets ...sub-section (6-A), mere distribution of bonus shares after capitalising the accumulated profits, unless the distribution entails the release by the company to its shareholders of any part of the ...
...provides:“46. (1) Notwithstanding anything contained in Section 45, where the assets of a company are distributed to its shareholders on its liquidation, such...because of Section 46(2) which was introduced to make the receipts of assets from a company in liquidation by its shareholders a taxable event for the first time. Section 46(2) provides...make shareholders liable for payment of tax on capital gains as well as to prescribe the mode of calculating the capital gains to the shareholders on the distribution of assets by a ...
...:“2. (22) ‘dividend’ includes—(a) any distribution by a company of accumulated profits, whether capitalised or not, if such distribution entails the release by the company t...the company;(b) any distribution to its shareholders by a company of debentures, debenture-stock or deposit certificates in...capitalised or not;(c) any distribution made to the shareholders of a company on its liquidation, to the extent to which the distribution is attributable to the accumulated profits of the...
...as originally enacted.
"46. Capital gains on distribution of assets by companies in liquidation. -(1) Notwithstanding anything contained in section 45, where the assets of a ..., sub-section (2) was enacted to subject the shareholders to the charge of capital gains on liquidation, on distribution of assets on the liquidation of a company. While sub-sect...capital gains on distribution of assets by a foreign company in liquidation was not valid.
The court further went on to hold (page 374) :
"Th...
...or undistributed profits of previous years. A Company as a going concern may distribute by way of dividend to the shareholders profits of the year or accumulated profits of the p...” the expression “dividend” had therefore the same meaning as it had in the Indian Companies Act, 1913, and the amount distributed among the shareholders by the liquidator out of the assets of the company ...). The House of Lords held that there was no ground for making an exception to the general rule that the surplus assets of a company, after providing for all liabilities, were divisible...
...shareholder receives on the liquidation of a company is in lieu of and on account of the shares held by him. Once a company goes into liquidation and the liquidator distributes the ...; (iii) in the course of liquidation of the company the liquidator sells the assets of the company and not the shares of the shareholders; and (iv) where a limited ...that the assets of a company, on its liquidation, shall be distributed among the shareholders according to their rights and interests in the company which necessarily means according to their shar...
..."on the money or other assets of a company received by its shareholder on its liquidation. Section 46(2) was enacted both with a view to making shareholders liable for payment of tax on c...well as to prescribing the mode of calculating the capital gains to the shareholders on the distribution of assets by a company in liquidation. Normally when a shareholder receives money ...law to attract the levy of tax on capital gains, and that section 46(2) does not create liability of a shareholder to pay tax on capital gains which liability arises because of section 45, but was enacted with ...
...liable to pay such a tax. On January 18, 1950, the Company went into liquidation and on April 22, 1950, -the liquidator distributed a portion of the assets among the shareholders, the appellant....
The facts, so far as they are material, are these The appellant is a resident of what was once the independent State of Udaipur. There was in that State a ...is not material, was in these terms:
" 6(A) 'dividend' includes-
(a) any distribution by a company of accumulated profits whether...
...shares, had not the effect of an acquisition of the undertaking owned by it. No doubt, on a dissolution of the company, the shareholders would be entitled to a distributive share ...Sugar Private Limited; but that will not amount to a purchase of the undertaking owned by that company. It is well settled that a company has separate legal personality apart from its shareholders...the owners of its assets including any undertaking. It is the company as a separate entity which alone can...
...institutions or statutory bodies. The challenge, therefore, founded on transfer of assets at lower price cannot be upheld as violative of public interest.13. Transfer of share to ....49. It was contended by Mr Dholakia that a foreign company was being given a large interest in the assets of TOMCO at a gross undervalue. We are unable to uphold this ...be distributed by way of dividends among the shareholders. He has undoubtedly a further right to participate in ‘the assets of the company which would be left over after winding up...
.... Section 108 reads as follows:“Loans to shareholders.— (1) If amounts are paid or assets distributed by a private company to any of its shareholders by way ...(whether as representing a part of the assets of the company or otherwise) by way of advance or loan to a shareholder or any payment by any such company on behalf or for the indi...the event of liquidation to participate in the surplus assets;(ii) any advance or loan made to a share-holder by a company in the ordinary course of i...
...Virudhunagar Ltd. v. A.S.R Subrahmanya Nadar AIR 1951 Mad 209, (1950) 2 MLJ 216. Section 153(A) of the Companies Act has been enacted with a view to facilitate arrangements and compromises between ...proposed by Appellant 1 company voluntarily yet it became binding and enforceable on all the parties only when it was made a rule of the court. It was, therefore, held that the transfer of assets and...liabilities including the leasehold interest of Appellant 1 company to Appellant 2 company took place by virtue of the order of the court. It was held that such a transfer of ...
...transfer or sale of the shares.... There is no transfer of any assets by the shareholders of Company A to Company B; the transfer of assets by company ...ticket; in other words just as a company before it indulges in capital issue does not hold any of its shares but only after they are issued they come to exist only in the hands of shareholders on their...”:“In a case where Company A amalgamates with and merges into Company B, and the shareholders of Company A are allotted shares in ...
...the respondent-assessees were shareholders of Tinnevely Motor Service Company Private Limited. The road transport business of the respondents was taken over by the then State of Madras as a result....1922 Act2. (6-A)(a) any distribution by a company of accumulated profits, whether capitalised or not, if such distribution entails the release by th...in which the sale took place.”1961 Act“2. (22)(a) any distribution by a company of accumulated profits, whether capitalised or not, if such distribution entai...
...counsel for the appellant had tacitly conceded to the fact that a corporate litigation was being fought on Mufassil pleadings.7. Where issue of shareholding in a company is the bone of conten...a company belong to the company and are not the assets of the shareholder. Through the shares held, exercising control over the company, the shareholders may...shareholder can sue for partition of the assets of a company as can be done by a partner or joint or co-owners of a property. The plaint is a hotchpotch of plea...
...has been further stated that upon the issue of bonus preference shares, the assets of the company will not be released and the case would not fall within the scope of section 2(22)(a). That in the...distribution by the company of accumulated profits, but such distribution must entail the release of assets by the company to the share holders. The question is therefore, 3 whether issue of bonus...that mere issue of redeemable bonus preference shares would not tantamount to payment of dividends unless these shares are redeemed by the Company. Only at that stage there will be release of assets ...
...income. Section 2(6A) of the Income-tax Act says that the word "dividend" includes inter alia distribution by a company of accumulated profits, whether capitalised or not, if the distribu...claim for a refund. They said that the delivery to the assessee of the bonus shares did not represent the payment of a dividend within the meaning of the Act. This is the question which forms the subject m...these profits and an additional sum taken from the reserve. Therefore there has been no release of assets of the company to the shareholders.
It has been said by Mr. Subbaraya Ayyar...
...treat the companies assets as their own. Directors of a company are liable for misappropriation of company's funds and other misfeasance, but not for an ordinary contractual liability of the ...XXXVII of the Civil Procedure Code.2. The appellants were the erstwhile Directors of the Company, M/s. Dawson Leasing Limited arrayed as defendant No. 1 in the suit, which was a company...said Company, namely, M/s. Dawson Leasing Limited for a period of 17 months. The appellants had also issued certain cheques to the respondents totalling Rs. 9,30,00/-, the details whereof are set out in...