1953 (6) TMI 10

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....or the year 1945-46 and 1946-47 of the Indian Steamship Company Limited, Calcutta which is the assessee. It appears that this company was floated in 1928, but existed in moribund condition up to the accounting year 1943-44. Indeed, although purported to be a Steamship Company, its subscribed share capital did not exceed Rs. 3,000 during that period. In the accounting year 1944-45, the company appears to have thought of launching upon real business and wanted to issue shares of the value of the Rs. 75,00,000 and debentures of the value of Rs. 25,00,000 in order to procure the necessary money for the purchase of ships. Under the Defence of India Rules, as then obtaining, it was necessary to obtain the permission of the Controller of Capital I....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....d in Government securities by reason of the condition imposed by the Controller of Capital Issues, it ought to be taken as money borrowed for the purpose of investment in securities. The authorities below repelled that claim on the ground that the object of issuing the debentures was certainly not to invest the money, coming there from in Government securities but to employ it in the assessees business and that the condition imposed by the Controller of Capital Issues made no difference. The assessee thereupon required Tribunal to refer the matter to this Court and a question has been framed and referred in the following forms :- "Whether on the above facts and circumstances of this case, the sum of Rs. 1,06,666 in the year 1945....