Judgment

SUBBA RAO, J. : The appeal by special leave is directed against the judgment of the High Court of Judicature at Madras in Tax Case No. 74 of 1959.

2. The facts may briefly be stated. The respondent-assessee, The Ajax Products Ltd. now under liquidation, was a public limited company incorporated in 1939 to carry on the business in the manufacture and sale of steel and abrasives products. On October 30, 1954, the company, at an extraordinary general body meeting, made a resolution to go into voluntary liquidation and the liquidator appointed by the said resolution carried on the business till the middle of December, 1954 when the business was completely closed down. on March 10, 1955, the Liquidator executed a sale-deed to Garboundum Universal Limited transferring to the latter the plant, machinery and buildings for a sum of Rupees 10.00,000. The said amount was made up of (1) Rs. 1,00,000 being the value of the land, (2)) Rs. 1,31,732 being the value of the buildings and (3) Rs. 7,68,268 being the value of plant and machinery. The books of the assessee Company showed that the original cost of the buildings was Rs. 3,46,034 that its written down value was Rs. 1,08,321, that th