COMMISSIONER OF INCOME TAX Vs. MAHADEO RAM KUMAR

JUDGEMENT

(1.) The facts material and the proceedings leading up to this reference are, inter alia, that by a notification dated May 15, 1958, the Government of India had taken over the management of Jessop and Co. Ltd., a public limited company carrying on business of manufacture of machinery and equipment for a limited period. By subsequent notifications issued respectively on May 6, 1961, and April 25, 1963, the Government of India continued to retain the management of the said company and, at the material time, the management of Jessop and Co. Ltd. remained with the Government of India.

(2.) Subsequently, the Government of India decided to purchase an adequate number of shares of Jessop & Co. Ltd. to obtain a controlling interest in the said company. The shares of Jessop & Co. Ltd. were quoted regularly in the stock exchange. At the material time, the total issued ordinary shares of Jessop & Co. Ltd. were 20,40,000 of Rs. 10 each fully paid up.

(3.) On July 17, 1963, an agreement in writing was entered into amongst nine parties including one M/s. Sohanlal Pachisia & Co. It was recorded in the said agreement, inter alia, that the said parties respectively held or had at their disposal ordinary shares in Jessop & Co. Ltd. aggregating to Rs. 11,23,000. The particulars of the shares of each of the parties were set out in the said agreement. Sohanlal Pachisia & Co. were shown to hold or have at their disposal along with their clients 3,28,100 shares. Mahadeo Ramkumar, the assessee, at the material time, held 15, 780 ordinary shares of Jessop & Co. Ltd. which were included in the said 3,28,100 shares of Jessop & Co. Ltd. declared by Sohanlal Pachisia & Co.