KISHAN PARSHAD AND CO LTD Vs. IN RE

JUDGEMENT

(1.) THIS is a reference under Section 66(1) of the Income-tax Act made by the Income-tax Appellate Tribunal Allahabad Bench. The questions of law as formulated by the Tribunal are these:

(2.) THE facts which have given rise to the reference are these. THE assessee is a public limited company incorporated in the year 1917 with the following objects:

(3.) A large number of authorities have been cited before us. Mr. Bajaj for the assessee company has endeavoured to make out a case that, as the assessee company had consistently shown in their balance sheets the shares held by them in the Sarswati Sugar Syndicate Limited under the heading "Investments " and no question to this had been raised previously by the Income-tax authorities, the latter were bound to recognise the transaction as what it had always been shown and admitted to be. Against this argument of estoppel a similar argument could well be raised by the Income-tax Department, for in the two balance sheets of the material years the two amounts of Rs. 20,000 and Rs. 2,26,700 appear as " profits on sale of shares". I think, however, the question falls to be decided on the true nature of the two receipts and not on any statements made in balance sheets by the assessee company.