JAGDEV SINGH MUMICK Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) Following question has been referred to this Court under section 66(1) of the Indian Income-tax Act, 1922 (hereinafter referred to as the Act) :-

(2.) The case relates to assessment year 1947-48, the previous year for which ended on March 1, 1947. The assessee is an individual who was carrying on business under the name and style of Mumick Opticians at Connaught Place, New Delhi. A private limited company called "Mumick Limited" (hereinafter referred to as the Company) was incorporated with the assessee as its Managing Director to take over the said business. An agreement to that effect was entered into between the said Company and the assessee on September 16, 1946- The nominal capital of the Company was Rs. 5 lakhs divided into 5000 ordinary shares of Rs. 100.00 each. Clauses I and 2 of the agreement read as under :-

(3.) The assets of the business of the assessee, viz. machinery, furniture,. stock and goodwill, were valued at Rs- 1,26,000. The Company in that connection issued 1260 shares of Rs. 100.00 each to the assessee and his nominees as under :- <FRM>JUDGEMENT_297_ILR(DEL)2_1970Html1.htm</FRM>