J K TRUST BOMBAY Vs. COMMISSIONER OF INCOME TAX EXCESS PROFITS TAX BOMBAY

JUDGEMENT

(1.) This is an appeal by special leave against the judgment of the Bombay High Court passed in a reference under S. 66 (1) of the Indian Income-tax Act, 1922 (herein after referred to as the Act) and Ss. 21 and 19 of the Excess Profits Tax Act, 1940 and of the Business Profits Tax Act, 1947, respectively read with S. 66 (1) of the Act.

(2.) On June 15, 1945 three brothers Sir Padampat Singhania, Lala Kailashpat Singhania and Lala Lakshmipat Singhania who were carrying on business under the name of Juggilal Kamlapat, executed a deed or trust, Exhibit A, whereby they settled a sum of Rs. 1,00,000/- on various charities specified therein and called the J. K. Trust, Bombay, and appointed themselves and two other persons Lala Ramdeo Podar and Sir Chunnilal Mehta as its trustees. The trust deed provided inter alia that

(3.) At this time, Messrs E. D. Sassoon and Co. Ltd., were the managing agents of a public company called the Raymond Woollen Mills Ltd. The firm of Juggilal Kamlapat of which the three Singhania brothers, were the partners, acquired a controlling interest in the said Mills by purchase of the shares of Messrs E. D. Sassoon and Co. therein and following on this, the shareholders passed a special resolution on September 3, 1945, appointing the trustees of the J. K. Trust as managing agents of the Company in the place of Messrs. E. D. Sassoon and Co., Ltd., who resigned.