COMMISSIONER OF INCOME TAX Vs. NAROTTAM PEREIRA LIMITED

JUDGEMENT

(1.) THE question raised by the Tribunal on this reference is whether, upon the facts found by the Tribunal, the assessee company is one in which the directors had a controlling interest within the meaning of Section 2(21)(a) of the Excess Profits Tax Act and rule 7(1) of Schedule I to that Act.

(2.) THIS reference came before me and my learned brother Mr. Justice Kania on the 19th September, 1945, and we sent the reference back to the Tribunal under Section 66(4) of the Act and requested them to record their findings on the three questions which we raised. The three questions were :-

(3.) SO it will be found that the shares held by these seven directors total 21 shares. The total ordinary shares of the company are 60 and therefore on this finding, out of the 60 ordinary shares 21 shares are held by the directors. As the finding stands, there can be no question that these directors have no controlling interest in the company. Before a controlling interest can be established, the directors must hold a majority of the shares and when the Tribunal has found that the directors hold only 21 out of 60 shares it is impossible to contend that the directors have a controlling interest.