COMMISSIONER OF INCOME-TAX, BIHAR & ORISSA Vs. SAHU JAIN LTD

JUDGEMENT

(1.) The question referred to this court by the Income-tax Tribunal under section 66(1) of the Income-tax Act in the aforesaid two consolidated cases is as follows :

(2.) The assessee is a limited company and the list of shareholders of the said company for the relevant previous years, namely, 31st August, 1952, and 31st August, 1953, is as follows : <FRM>JUDGEMENT_15_LAWS(PAT)12_19651.html</FRM>

(3.) The main contention of Mr. Datta for the department is that the Tribunal has misdirected itself and has assumed that once it is held that Shrimati Rama Jain and Shri Alok Prakash Jain are not the nominees of Shri S. P. Jain, it necessarily follow that they are not under the control of Shri S. P. Jain. He contended that even though they may not be the nominees in the sense that there is no evidence that the consideration for the purchase of the shares by those persons was meet by Shri S. P. Jain, nevertheless, it was open to the court of fact, bearing in mind all the facts and circumstances of the case to hold that they all acted in concert. He relied very much on the two decisions of the Supreme Court, namely, Raghuvanshi Mills Ltd. v. Commissioner of Income-tax and Commissioner of Income-tax v. Jubilee Mills Ltd., where their Lordships have pointed out the true scope of the Explanation to section 23A of the Income-tax Act. In fairness to the Tribunal, however, it should be pointed out that their order was passed on the 26th January, 1961, whereas the judgment in the Raghuvanshi Mills case by the Supreme Court was delivered only on the 7th December, 1960, and presumably not brought to their notice.