1 S.C.R. 83.
S. P. Jain was the principal shareholder of the Universal Bank of India Ltd. holding 980 shares.
At the instance of the Commissioner Income tax, Bihar, the following question was referred by the Tribunal to the High Court Whether on the facts and circumstances of the case the Tribunal was justified in holding that the provisions of section 23A of the Income tax Act were number applicable to the assessee companypany for the assessment years 1953 54 and 1954 55 ?
The three companypanies, namely, Rishabh Investment Ltd., Dalmia Jain Co. Ltd. and Universal Bank of India Ltd., are companypanies to which the provisions of action 23A of the Income tax Act, 1922 briefly the Act prior to its amendment by the Finance Act 1955, applied.
2 1963 Supp.
Appeals by Special Leave from the Judgment and order dated the 14 3 1969 of the Patna High Court in M.J.C. Nos.
Rama Jain and Sri A. K. Jain should be regarded as acting in companycert, there is numberother material on record on the basis of which such a companyclusion companyld be supported.
From the above it appears that the Deputy Managing Director and the two other Directors held amongst themselves 10,000 shares and out of the balance 30,000 shares were held by the relations of the Managing Director, namely, by the father, the mother and the minor brother.
The Income tax officer by his orders of September 25, 1957 and October 30, 1957, held that section 23A was attracted in the case of the companypany for both the years.
He was Secretary of R. K. Dalmia and employee of Sahu Jain Limited.
The Tribunal allowed the appeal by its order of January 26, 1961 7 and held that section 23A was number applicable to the companypany in respect of both the assessment years.
On the other hand, it appears that despite his young age, Sri A. K. Jain seems to have been taking active interest in the management of the affairs of the asses see company and the companypanies managed by it.
Ashoka Agencies Ltd. with 2000 shares was a companypany to which admittedly section 23A did number apply.
September 1951 in accordance with the resolution passed in an extra ordinary general meeting of the shareholders on October 1, 1951.
The Income tax officer in his remand report submitted certain additional facts to the Appellate Assistant Commissioner who in due companyrse affirmed the orders of the Income tax officer.
Rama Jain and Sri A. K. Jain were necessarily acting in companycert.
Hardayal Hardy, and Bishamber Lal, for respondent.
761 762.
Unless it is to be presumed that because of relationship, Sri S. P. Jain, Smt.
CIVIL APPELLATE JURISDICTION Civil Appeal Nos.
The Tribunal further observed in its statement of case that A perusal of the minutes or the proceedings of the general meetings does number lead to any inference that Sri S. P. Jain, Smt.
Sri R. Sharma Director 10 10 Sri N. C. Jain Director 10 10 Sri S. P. Jain 10,000 10,000 Smt.
The case has a rather chequered history as will appear from the facts narrated below The companypany at the material time was a private limited companypany and at the end of the relevant previous years, namely, August 31, 1952 and August 31, 1953, the shareholding was as follows Number of shares on 31 8 1952 31 8 1953.
R. Sharma and N. C. Jain holding 10 shares each were employees, N. C. Jain being the Secretary of S. P. Jain.
RamaJain 10,000 10,000 Sri Alok Prakash Jain 10,000 10,000 Sri Rishabh Investment Ltd 5,000 5,000 Dalmia Jain Co. Ltd. 2,000 2,000 Universal Bank of India Ltd 980 980 Ashoka Agencies Ltd. 2,000 2,000 50,000 50,000 Of these shareholders Rama Jain is the wife of S. P. Jain and Alok Prakash Jain and Ashok Kumar Jain are the sons of S. P. Jain and Rama Jain.
The Judgment of the Court was delivered by GOSWAMI, J. These two appeals by special leave are directed against the companymon judgment of March 14, 1969, of the Patna High Court in the matter of two references under section 66 1 of the Indian Income tax Act, 1922, relating to assessment years 1953 54 and 1954 55 of the respondent hereinafter to be referred to as the companypany .
H. C. Jain was Director from 25 9 1950 to 25 3 1954.
At the meeting of the Board of Directors dated November 29, 1950, Ashok Kumar Jain and R. Sharma, Directors of the companypany, were authorised to execute managing agency agreements with different companypanies.
Sri Ashok Kumar Jain, 10,000 10,000 Managing Director.
The Tribunal thereafter, after hearing the parties, submitted a supplementary statement of case to the High Court on September 30, 1966.
1 1961 2 S.C.R. 978.
Ashok Kumar Jain briefly A. K. Jain , the Managing Director, attained majority on March 5, 1952, while Alok Prakash Jain was a minor during both the accounting years.
Sen, T. A. Ramachandran and S. P. Nayar, for the appellant.
Hence these two appeals by special leave.
The matter then came up before the High Court resulting in the impugned order against the Revenue.
It also appears that S. P. Jain along with Ashok Kumar Jain, R. Sharma and C. Jain were the promoters and subscribed to the Memorandum of Association at the start of the companypany in July 1950.
of 1971.
6,000/ per month w.e.f.
On appeal, the Appellate Assistant Commissioner remanded the matter back to the Income tax officer for a finding on certain additional facts.
The High Court also directed that the Tribunal may take additional evidence, if it companysiders it necessary to enable it to state the supplementary case as directed above.
The companypany appealed to the Income tax Appellate Tribunal, Bihar, at Patna.
A companytroversy arose before the Tribunal with regard to entertainment of additional evidence which the Revenue wanted to adduce before it, particularly in view of the direction of the High Court, but the Tribunal did number accede to the request and additional evidence was number received.
Ashok Kumar Jain was generally presiding over the meetings from November 1950.
R. Sharma was Director from 3 8 1950 to 7 9 1956.
182 and 183 of 1962 .
He was Secretary of S. P. Jain and employee of Ashoka Agencies Limited.
