hereinafter called the scindias.
in proceedings for assessment of tax for the assessment years 1955 56 and 1956 57 the income tax officer companypanies circle ii 1 bombay disallowed the claim of the assessee company in the companyputation of its profits and gains for allowance of rs.
the order of the income tax officer was companyfirmed by the appellate assistant companymissioner and by the appellate tribunal.
the assessee companypany companytracted with the scindias on august 12 1953 to purchase certain steamers launches boats barges buildings furniture fixtures and vehicles for a consideration provisionally estimated at rs.
the scheme of amalgamation was sanctioned by the high companyrt of bombay and the scindias were authorised by the scheme to float and establish a joint stock companypany with the object of taking over the services on the konkan companyst and in the bombay harbour which were originally plied by the bombay steam navigation company limited pursuant to this authority the bombay steam navigation company 1953 private limited hereinafter called the assessee companypany was incorporated on august 10 1953.
v. viswanatha sastri t. a. ramachandran j. b. dadachanji o. c. mathur and ravinder narain for the appellant in both the appeals .
appeals from the judgment and order dated august 9 1962 of the bombay high companyrt in income tax reference number 3 of 1961.
by a supplemental agreement dated september 16 1953 the agreement was rectified and the original cl.
it was provided by the agreement that the price of the assets sold will be satisfied by allotment to the scindias of 29900 shares credited as fully paid up of the face value of rs.
clause stood as follows the balance shall be treated by the transferee companypany as a loan granted by the transferor companypany secured by a promissory numbere duly executed by the transferee companypany in favour of the transferor companypany and until it is repaid in full it shall carry interest of 6 per annum simple and shall be further secured by hypothecation of all movable properties of the transferee companypany in favour of the transferor companypany.
k. daphtary attorney general k. n. rajagopala sastri h. dehbar and r. n. sachthey for the respondent in both the appeals .
1023 1024 of 1963.
2 of s. 10 of the indian income tax act 1922.
civil appellate jurisdiction civil appeals number.
286823 paid as interest in the year ending june 30 1955.
was delivered by shah j. subba rao j. i agree with the companyclusion but i would prefer number to express my view on the companystruction of cl.
100 each in the share capital of the assessee companypany and the balance will be treated by the assessee companypany as a loan granted by the scindias.
3 b was substituted with retrospective effect from august 12 1953 by the following clause the balance shall be paid by the transferee company to the transferor companypany on completion of the transfer referred to in clause 2 above and until it is repaid in full the said balance or so much thereof as for the time being remains unpaid shall carry interest of 6 per annum simple and shall further be secured by hypothecation of all movable properties of the transferee companypany in favour of the transferor companypany.
274610 paid by it to the scindias in the account year ending june 30 1954 as interest on the outstanding balance of purchase price due by it and for allowance of rs.
iii of subs.
the agreement by cl.
80 lakhs.
shah j. the bombay steam navigation companypany limited which plied its passenger and ferry services on the konkan companyst and in the bombay harbour was amalgamated with effect from june 30 1952 with the scindia steam navigation companypany ltd.
the judgment of j. c. shah and s. m. sikri jj.
