Dipak Kumar Sen, J. - (1.) Calcutta Discount Co. Pvt. Ltd., the assessee, was incorporated on November 26, 1917. At its incorporation, all the shares of the assessee were held by Sir David Yule, who died on July 3, 1928, and after his death the shares of the assessee came to be held by a trust estate. At the material time, the assessee had invested largely in Indian shares and had made loans and advances to a number of limited companies consisting of, and under the control of, the Yule group of companies.
(2.) The administration of the estate of Sir David Yule was completed by 1934 and in a letter dated January 19, 1934, from Yule Catto & Co. Ltd. to M/s. Andrew Yule & Co. Ltd., it was recorded that the assessee should carry on business as an investment company.
(3.) In 1934, the successors of Sir David Yule floated another company by the name "Meryl Investment Co. Ltd.", a sterling company to which all the shares of the asseseee, which were being held by the trust estate were transferred. Meryl Investment Co. Ltd. was wound up in 1940 and another company known as "Meryl Co. Ltd." was incorporated. The new company took over all the shares of the assessee which became a 100% subsidiary of Meryl Co. Ltd.;