BHADANI BROTHERS LTD Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) WE have had some difficulty in following the facts of this case, because it does not appear at all clear what the assessees' contention regarding the facts was and on what basis they wanted the questions of law to be considered. In the course of the argument I happened to observe that the assessee appeared to me to have been merely kiteflying and Mr. Mitra, who was appearing for them before us, frankly confessed that as regards comprehending his clients' case before the authorities below, he did not find himself in a better position.

(2.) THE assessees are a private limited company. It appears that during the accounting year ending in December, 1946, they became minded to acquire the managing agency of the Madhusudan Mills Limited, Bombay, and opened negotiations with the then managing agents, M/s Amersey Damodar. It is stated in the statement of case that the negotiations were for the purchase of the managing agency rights along with 80 per cent of the share capital of the Mills concerned. THE arrangements for the purchase of the shares and those for the purchase of the managing agency were entered into at the same time, but the purchase of the shares was concluded in June, 1946, while, because of certain formalities which had to be gone through, the purchase of the managing agency rights was not concluded till the 19th Aug., 1946. This much of the facts is clear.

(3.) THE question referred to this Court is as follows :