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PETITIONER: RAGHUVANSHI MILLS, LTD.
Vs.
RESPONDENT: 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 743 1961 SCR (2) 978 CITATOR INFO : F 1961 SC1154 (6,8) R 1967 SC 768 (13) RF 1976 SC1141 (3,13)
ACT: Income Tax--Majority shares of the assessee company held by Directors and their relations, if can be treated as held by the Public--Test--Indian Income-tax Act, 1922 (11 of 1922), S. 23A, Third Proviso, Explanation (before amendment by the Finance Act, 1955).
HEADNOTE: One Maganlal Parbhudas who was a Director of the assessee company held 6,344 shares out of a total of 10,000 shares of the company and he made a gift of 1000 shares to each of his five sons. During the accounting period the company had eight Directors including the said Maganlal Parbhudas and two of his sons and they held 4695 shares as between themselves. Out of the balance of the shares 4754 shares were held by the relatives of some of the Directors. Three sons of Maganlal Parbhudas were Directors of the Managing Company. The Income-tax Officer applied s. 23A of the Income-tax Act as it stood prior to its amendment by the Finance Act, 1955 to the company holding that this was not a company in which the public were substantially interested. The or...