M.N.Roy, J. - (1.) The petitioner No. 1, M/s. Tube Mill (India) Private Limited (hereinafter referred to as the "said company"), is a company registered and incorporated under the Companies Act, 1956, and the petitioner No. 2, Sri Satya Narayan Mundhra, is a director and shareholder of the same. The said company is stated to be a regular assessee and duly assessed under the provisions of the Income-tax Act (hereinafter referred to as "the said Act"). It has been alleged that the said company held on lease a land under a lease deed between one Juggi Lal Kamalapat and Sri Jagadish Rai Jain, one of the directors of the said company. The said deed was executed on 25th April, 1962. It has been stated further that by the said deed, it was agreed by and between the parties that the lessor would not give notice of termination of the lease for a period of 10 years from 1st March, 1962. The lease in question was in respect of a total land of 5 bighas 1 cottah and 14 chataks 32 sq. ft. of land. It has also been stated that although, as a lessee, the name of Jagadish Rai Jain appeared in the aforesaid deed, he held the property for and on behalf of the said company. The term of the lease admittedly is to expire on 21st April, 1982, as the lease in question would be valid for 20 years from the date as mentioned hereinbefore, the same is to continue at a monthly rental of Rs. 2,150.
(2.) M/s. Juggi Lal Kamlapat published an advertisement in the daily issues of "The Statesman" on 7th June, 1972, to sell the entire land holdings, being approximately 28 bighas at 27, Malipanchghara Street, Bally, Howrah, and in pursuance of such advertisement, although there were offers by various intending purchasers, none of those offers could materialise because a low price was offered in view of the fact that the premises was subject to an existing lease. It has been contended that, thereafter, one Smt. Poonam Devi Jain and Smt. Rashmi Devi Jain expressed their willingness for the purchase of the premises and these lands in question and ultimately for a sum of Rs. 80,000, 5 bighas 1 cottah 14 chataks and 32 sq. ft. of land was sold to them by the said Shri Juggi Lal Kamlapat. The petitioners have alleged that since the property was held by the said company and as the subsequent purchaser as mentioned above found it extremely difficult to eject the said company, they agreed to sell 1/2 of their respective shares of land to the said company at a sum of Rs. 60,000 and in fact such transfer between those transferees on the one hand and the said company on the other was effected under two deeds of conveyances dated 29th September, 1973, and 27th September, 1973, respectively.
(3.) These apart, it has been contended that after such purchase, the said company has been in due possession of the lands in question as aforesaid and also of the balance of the lands on purchase for Rs. 60,000 and thereon constructed structures and boundary walls, not only on the lands so purchased, but also on the lands for which they were lessees, with the stipulation that on the expiry of the lease they would get the price of the said construction as settled or would remove the structures as constructed. It has also been alleged by the petitioners that at the time of the purchase of the property, the title to the same was fully and duly investigated, that no notices of ejectment, acquisition or anything of a like nature or any notice under Section 269D(1) of the said Act, was served upon their vendors.;