(1.) This case relates to several years of assessment. It also relates to two brothers namely Shri R. N. Gupta and Shri Krishan Mohan who will hereafter be called "assessees". Several applications for referring the questions of law arising out of the judgments of the Income Tax Appellate Tribunal (Delhi Bench "A") were filed by the assessees.
(2.) In the case of Shri R. N. Gupta the relevanyears of assessment are 1959-60, 1960-61 and 1961-62, the accounting periods being the calendar years 1957, 1958, 1959, 1960 and 1961 respectively. Some of the reference applications which were filed before the Tribunal arose under Section 66(1) of the Indian Income Tax Act, 1922 while others arose under Section 254 of the Income Tax Act, 1961. Since the facts involved in the appeals of both the assessees were similar and the same questions of law arose out of the orders of the Tribunal, a common statement of case was drawn up by the Tribunal and referred, originally to the High Court of Judicature at Chandigarh. After the' coming into force of the Delhi High Court Act, 1966, the statement of case is now before us. The questions of law are as follows :-
(3.) The assessees in this case are shareholders in a company known by the name of Motor & General Finance Limited. The said Company resolved to issue equity shares of Rs. 10.00 each at par to the existing equity shareholders who were entitled to exercise the "right" to renounce the shares offered to them or any portion of the same in favour of any other persons in the prescribed form. The person in whose favour the equity shareholder renounced the shares offered to him, was to apply in the prescribed form with the said sum of Rs. 10 per share before a particular date. On the payment being made the said person became entitled to the share or shares so applied for.