COMMR OF INCOME TAX WEST BENGAL Vs. JEEWANLAL LTD

JUDGEMENT

(1.) This is an appeal from the judgment and order of a Bench of the Calcutta High Court delivered on a reference made by the Income-tax Appellate Tribunal under S. 21, Excess Profits Tax Act, 1940 read with S. 66(1), Income-tax Act, whereby the High Court answered in the affirmative the question of law referred to it. The question referred was:

(2.) The controversy arose between the parties during proceedings for assessment of Excess Profits Tax for five chargeable accounting periods ending on 31st December of each of the years 1939 to 1943.

(3.) The relevant facts which are not in dispute are these: The respondent company is a company incorporated in what was then British India having a capital of Rs.36,00,000 divided into 360,000 shares of Rs. 10 each. The Aluminum Limited, a company incorporated in Canada, held 359,790 shares in the chargeable accounting periods ending on 31-12-1939 and 31-12-1940 and 359,600 shares in the chargeable accounting periods ending on 31-12-1941, 31-12-1942 and 31-12-1943. In exercise of the power given to it by Article 105 of the Article of Association of the respondent company, the Aluminium Ltd. appointed three permanent directors on the board of directors of the respondent company. Two of these directors eventually retired and only one, namely, Mr. L. G. Bash continued to be a director of the respondent company nominated by the Aluminium Ltd.