20,000 realised in the assessment year 1942 43 and Rs.
In 1933, another public limited companypany was incorporated by the name of Sarswati Sugar Syndicate Ltd., hereinafter called the sugar companypany.
5,00,000 in the sugar companypany in lieu of which it was to be given the managing agency of the third mill of the sugar companypany number in existence at the time but expected to be erected in 1933 when such mill was erected, on the same terms as given by the sugar companypany to other managing agents of their two other existing mills.
The investment of Rs.
This order was companyfirmed by the Appellate Assistant Commissioner and the Income tax Appellate Tribunal.
15,000 as companymission upon the moneys invested by them in shares.
Lala Kishan Prasad, managing director of the assessee companypany, entered into an agreement with the sugar companypany in March, 1933, whereby the assessee companypany was to invest Rs.
The latter then referred at the instance of the assessee companypany the two questions set out above to the High Court of Punjab.
7,00,000.
3,00,000 and the remaining shares of Rs.
5,00,000 by the assessee companypany was made companyditional on the sugar companypany receiving other applications for shares to the tune of at least Rs.
There was subsequently a modification to the effect that the assessee companypany would themselves subscribed to shares worth Rs.
3,00,000 were purchased and share certificates duly issued by the sugar companypany to the assessee companypany.
It was further agreed that if the third mill was number erected then the sugar companypany was to pay to the assessee companypany Rs.
2,00,000 will be subscribed to by their friends.
3,000 shares of the value of Rs.
Mehr Chand Mahajan, C.J. This appeal is preferred against the judgment of the High Court of Punjab at Simla, dated 18th June, 1951, delivered on a reference under section 66 of the Indian Income tax Act whereby the High Court answered the following two referred questions in the affirmative Whether on a proper companystruction of the relevant clauses of the appellant companypanys memorandum of association and articles of association and on a companysideration of the circumstances in which the shares of the Sarswati Sugar Syndicate were purchased and sold, it companyld be held that the purchase and sale of such shares was a part of Appellant companypanys business deal ?
