During the account year, Maganlal Parbhudas and two of his sons, Ravindra Maganlal and Surendra Maganlal, were three of the Directors of the Company.
Prior to November 14, 1941, one Maganlal Parbhudas, who was a Director of the Company, held 6,344 shares.
5,000 and the five sons of Maganlal Parbhudas who have been named before had subscribed that capital equally.
On November 14, 1941, he made a gift of 1,000 shares to each of his five sons, Ravindra, Surendra, Bipinchandra, Hareshchandra and Krishnakumar.
The Managing Company had a total issued and subscribed capital of Rs.
Appeal by special leave from the judgment and order dated September 1, 1955, of the Bombay High Court in Income tax Reference No.
Before March, 1942, Messrs. Ravindra Maganlal and Bros. were the Managing Agents of the Company.
a period of 20 years.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
Maganlal Parbhudas was the sole proprietor of that firm.
100 each.
On March 7, 1942, the Company appointed Ravindra Maganlal Co. Ltd. as the Managing Agents for.
30 of 1957.
10,00,000 divided into 10,000 shares of Rs.
37 of 1952.
Ravindra, Surendra and Bipinchandra were Directors of the Managing Company.
By the second order, the High Court re framed the question, and answered it against the assessee.
During the accounting period, the Company had eight Directors, whose names along with the shares respectively held by them are given below Shares Shri Maganlal Parbhudas 1,344 Ravindra Maganlal 1,168 Surendra Maganlal 1,100 Amritlal Chunilal jointly with Babulal Chunilal 833 Babulal Chunilal 100 Bhagwandas Harakchand 50 Haridas Purshottam 50 Sir Chunilal B. Mehta jointly with Lady Tapibai Chunilal 50 Total 4,695 Out of the balance of the shares, 4,754 shares were held by the relatives of some of the above named Directors, as stated below Shares Shrimati Kantabai Maganlal wife of a Director 771 Shri Bipinchandra Maganlal 1,000 Shri Hareshchandra Maganlal son of a Director 1,000 Shri Krishnakumar Maganlal do 1,000 Shrimati Dhanlaxmi Mohanlal Srimati Prabhavati Nanalal Harilal 5 and 6 daughters of a Director 50 Shri Hirjibhai Purshottam and Haridas Purshottam brothers of a Director 25 Shri Dhanjibhai Purshottam and Haridas Purshottam brothers of a Director 25 Shri Chimanlal Vithaldas companysin of a Director 833 Total 4,754 The remaining 551 shares were held by the members of the public, who were number companynected with the Directors of the Company in any way.
On these facts, the Income tax Officer applied s. 23A as it stood prior to its amendment by the Finance Act, 1955 to the Company, holding that this was number a Company in which the public were substantially interested.
The assessee Companys issued and subscribed capital was, at the material time, Rs.
N. Rajagopala Ayyangar and D. Gupta, for the respondent.
A. Palkhivala and I. N. Shroff, for the appellant.
By the first order, the Bombay High Court directed the Income tax Tribunal to submit a supplementary statement in the case in the light of its judgment, giving the parties liberty to lead further evidence, if any.
The order of the Income tax Officer was companyfirmed on appeal, both by the Appellate Assistant Commissioner and the Tribunal.
The Judgment of the Court was delivered by HIDAYATULLAH, J. The Raghuvanshi Mills Ltd., Bombay a public limited Company , has filed this appeal by special leave against the judgment and orders of.the High Court of Bombay dated March 10, 1953, and September 1, 1955.
December 7.
