STAR CO LIMITED Vs. COMMISSIONER OF INCOME TAX CENTRAL CALCUTTA

JUDGEMENT

(1.) Explanation to S. 23A (i) of the Income Tax Act, 1922 before it was amended by Finance Act 1955 (in so far as it is material for the purpose of these appeals) provided:

(2.) For a company to be deemed a company in which the public are substantially interested, two conditions must co-exist, (1) the shares of the company carrying not less than 25 p. c. of the voting power must have been allotted unconditionally to or acquired unconditionally by the public, and (2), (a) that any such shares have in course of the previous year been the subject of dealings on any stock exchanges, or (b) that the shares are in fact freely transferable by the holders to other members of the public.

(3.) It is common ground that condition (1) is satisfied in this case. In respect of condition (2) there was controversy and this Court by order dated February 11, 1969 directed the Income-tax Appellate Tribunal to submit a supplementary statement of case on the following four points: