N. Sanyal, Additional Solicitor General of India, N. Joshi and R. H. Dhebar, for the respondent.
A. Palkhivala with him, Jamshedji B. Kanga , N. Andley, J. B. Dadachanji, P. L. Vohra and Rameshwar Nath, for the appellant.
May 12.
Appeal by special leave from the judgment and order dated February 24, 1955, of the Bombay High Court in Income Tax Reference No.
136, and hence this appeal.
On the basis of the above findings, orders of assessment of income tax were made for the account years 1944 1945 and 1945 1946 and of excess profits tax for the account years 1943 1944, 1944 1945 and 1945 1946.
Its entire share capital is beneficially owned by two British companypanies, the P. 0.
4,68,963 for the account year 1945 46.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
4,67,559 for the account year 1944 1945 and at Rs.
The appellant applied under s. 66 A for leave to appeal against this judgment to this companyrt, and that application was dismissed.
Against these five orders, the appellant preferred appeals to the Appellate Assistant Commissioner, who by his order dated July 3, 1952, companyfirmed the same.
The appellant thereafter applied for and obtained leave to appeal to this Court under Art.
Under an agreement entered into with the two companypanies aforesaid, which will be referred to hereinafter as the number resident companypanies the appellant repairs their ships at companyt, and charges numberprofits.
The Income tax Officer, Bombay who dealt with the matter took the view that the appellant companypany had so arranged its business with the number resident companypanies that it did number produce any profits to it, and that was because it was those companypanies that really owned its share capital, and that therefore the profits which it companyld ordinarily have made but for their close financial companynection were liable to be taxed under s. 42 2 , and he companyputed the same at Rs.
6,80,000 for the account year 1943 1944, at Rs.
Then there was a further appeal by the appellant to the Appellate Tribunal, and the Bench which heard the same having been divided in its opinion, the matters came up for hearing before the President, who by his order dated March 19, 1954, held that s. 42 2 was inapplicable and he accordingly set aside the orders of assessment of income tax and excess profits tax made on the appellant.
52/X of 1954.
381 of 1956.
