ORIENTAL INVESTMENT CO PRIVATE LIMITED Vs. COMMISSIONER OF INCOME TAX BOMBAY

JUDGEMENT

(1.) These appeals are brought by certificate from the judgment of the Bombay High Court dated March 2, 1966 in Income-tax Reference No. 73 of 1962.

(2.) The appellant company, hereinafter called the assessee company was incorporated on July 29, 1924, as an investment company, the objects of which are set out in clause III of the memorandum of association and more particularly in sub-cls. (1), (2), (15) and (16) of that clause. The assessment years in question are 1943-44 to 1948-49, excepting the year 1947-48, According to its petition made in the High Court, the assessee company dealt with its assets as follows:

(3.) Prior to 1940 the assessee company made a claim every year for being treated as a dealer in investments and properties but this contention was repelled by the Income-tax Authorities and upto the assessment year 1939-40 the assessee company was assessed on the basis of being an investor but it appears that for the assessment years 1940-41, 1941-42 and 194243 the Income-tax Department accepted the plea of the assessee company and treated it as a dealer in shares, securities and immovable properties and assessed it on that basis. For these years and for the assessment year 1943-44 the assessee company made its return on that basis. But after the return had been filed for the year 1943-44, the assessee company withdrew its return and filed a revised return on March 7, 1944, contending that it was not a dealer but merely an investor. Along with the return it filed a letter dated March 6, 1944 in which it stated: