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PETITIONER: SHREE CHANGDEO SUGAR MILLS, LTD.
Vs.
RESPONDENT: THE COMMISSIONER OF INCOME TAX, BOMBAY
DATE OF JUDGMENT: 07/12/1960
BENCH: HIDAYATULLAH, M. BENCH: HIDAYATULLAH, M. KAPUR, J.L. SHAH, J.C.
CITATION: 1961 AIR 1154 1961 SCR (2) 990
ACT: Income-tax--Undistributed income--Company in which Public are substantially interested--Powers to assess Super Tax--Test--Part B States (Taxation Concession) Order, 1950, cl. 14--Indian Income-tax Act, 1922 (11 of 1922), S. 23A(1).
HEADNOTE: During the assessment year, the company had not distributed dividends to the extent of 60% of its profits and an order under S. 23A(1) of the Act was passed by the Income-tax Officer. The question referred by the Tribunal to the High Court was whether at the relevant time the assessee company could be deemed to be a company in which the public were substantially interested, i.e., held 25% of the voting power, was answered in the negative. Held, that the test that no holding by the Directors of a company could be regarded as one in which the public were substantially interested was not the correct test to apply. The test as laid down in Raghuvanshi Mills v. Commissioner of Income-tax, [1961] 2 S.C.R. 978, would apply to this Case. Held, further, that the paramount condition in applying the proviso and the explanation of S. 23A(1) was that the public should be benefi...