COMMISSIONER OF INCOME TAX Vs. JUBILEE MILLS LTD

JUDGEMENT

(1.) THIS is an appeal on a certificate of fitness granted by the High Court of Bombay against the judgment of the High Court dated March 13, 1958, on a reference made by the Income-tax Appellate Tribunal. The Commissioner of Income-tax, Bombay City I, is the appellate and the Jubilee Mills Ltd., Bombay, the respondent. The only question raised in this appeal is the application of section 23A of the income tax to the assessee company.

(2.) THE assessee company is a limited liability company with a paid up capital of Rs. 15, 25, 000. Its paid up capital is made up as under :

(3.) THE assessee company was being managed by a firm called Mangaldas Mehta & Co. That firm consisted of fourteen partners of whom seven were the directors of the assessee company. The members of the managing agents who were also directors held between them 35, 469 ordinary shares and 880 first preference shares. The remaining seven members of the managing agents, who were not directors of the assessee company, held respectively 41, 659 and 370 shares of the two categories. Seventy-five shares were held by Girdhardas & Co. Ltd., to which company admittedly section 23A was applicable. Some of the members of the managing of the managing agency firm held on behalf of their minor children or on behalf of their families 9, 899 ordinary shares and 937 first preference shares. The following is a detailed break-up of the share holdings :