KESUB MAHINDRA Vs. COMMISSIONER OF GIFT TAX

JUDGEMENT

(1.) THE following questions have been referred for our decision :

(2.) THE reference has been made in regard to three assessees who are brothers, namely, Keshub Mahindra, Suresh Mahindra and Harish Mahindra (hereinafter referred to as the Mahindras or Mahindra brothers or the assessees). THE facts and the questions of law involved in regard to each assessee are the same and were also decided before the Tribunal by one order. THE year of assessment is 1959-60 and the corresponding previous year is the year ended 31st March, 1959. THE Mahindras were, during the relevant year of account, shareholders of the company known as Mahindra & Mahindra Ltd. (hereinafter referred to as the company). In this company Harish Mahindra held 80,000 shares, Suresh Mahindra 79,900 shares and Keshub Mahindra 78 700 shares. Between themselves they held 43.44% of the total capital of the company. Harish Mahindra and Keshub Mahindra were at all material times two of the directors of the company and Suresh Mahindra was an officer in the company.

(3.) ON the 9th Oct., 1957, another agreement was entered into between the company on the one hand and Willys and Export on the other hand. By this agreement Export agreed to sell 798 vehicles in C.K.D. condition to the company and Export secured certain rights over the new issue of shares which the company was contemplating. We will presently refer to the terms of cls. 4 and 5 of the agreement dt. 9th Oct., 1957, whereby these rights over the new issue of shares were obtained by Export and to the complementary letter written on the same date by the Mahindras to Export.