COMMISSIONER OF INCOME TAX DELHI RAJASTHAN NEW DELHI Vs. NATIONAL FINANCE LIMITED :NATIONAL FINANCE LIMITED

JUDGEMENT

(1.) THE following Judgment of the court was delivered by :

(2.) THIS is an appeal againstthe order of the Income-tax Appellate tribunal,Delhi bench, dated May 1/14, 1957, by which thetribunal, reversing the order of the AppellateAssistant Commissioner, held that a loss arisingfrom the sale of certain shares by the respondentCompany was a capital loss. Subsequent to theorder of the tribunal impugned here, theCommissioner of Income-tax, New Delhi, who is theappellant before us, had moved the tribunal for areference to the High court on certain questionsof law said to arise out of the order of theAppellate tribunal. That application was found tobe barred by one day, and since, under the law,the tribunal had no jurisdiction to extend thetime, the application was dismissed. Against thedecision of the tribunal, an application was filedin the High court under s. 66(3) of the Income-taxAct; but the High court dismissed the application,agreeing with the tribunal that the application tothe tribunal for a reference was barred by time.The Commissioner of Income-tax then applied forspecial leave against the order passed by theTribunal in the appeal before it, and the presentappeal, with special leave, has been filed.

(3.) THE assessee Company belongs to a group ofCompanies controlled by one Lala Yodh Raj Bhallaand certain persons associated with him. It isconvenient to describe these persons as the 'YodhRaj Bhalla group'. THEse Companies are (1) JaswantSugar Mills Ltd., (2) Jaswant Straw Boards Ltd.,(3) National Finance Ltd., (4) NationalConstruction and Development Corporation Ltd., (5)Ganesh Finance Corporation Ltd., and (6) RaghunathInvestment Trust Ltd. THE interrelation of these.Companies is very intimate, and they arepractically owned by the 'Yodh Raj Bhalla group'.To understand this, the following analysis of theshareholdings of these Companies must besufficient: <FRM>JUDGEMENT_835_AIR(SC)_1963Html1.htm</FRM> THE resulting position may be stated thus: GaneshFiance Corporation Ltd. practically owns theassessee Company and National Construction andDevelopment Corporation Ltd., Raghunath InvestmentTrust Ltd. practically owns the Ganesh FinanceCorporation Ltd., and 'Yodh Raj Bhalla group'practically owns Raghunath Investment Trust Ltd.Jaswant Sugar Mills Ltd. is practically owned byJaswant Straw Board Ltd., National Finance Ltd.,and National Construction and DevelopmentCorporation Ltd., and Jaswant Straw Board Ltd., ispractically owned by National Finance Ltd., andNational Construction and Development CorporationLtd. Thus, the entire group is owned by aconsortium, and there is no doubt about it.