TaxTMI 
TaxTMI 
1977 (2) TMI 2
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....ny as defined in the Companies Act, 1956 (1 of 1956), and (i) its shares ...... carrying not less than fifty per cent. of the voting power have been allotted unconditionally to, or acquired unconditionally by, and were throughout the relevant previous years beneficially held by ...... the public (not being a director, or a company, to which this clause does not apply)," The assessee, in the instant reference, is a company with the issued, subscribed and paid-up capital of 12,500 ordinary shares of Rs. 100 each. The said shares were held as follows : " A. INDIVIDUALS No. OF SHARES Shri Gokul Chand Bangur 600 Smt. Kamala Devi 800 " Rajkumari Devi &nbs....
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.... ------ 12,500 The following are the figures on the basis of which s. 104 was applied: 1963-64 ....
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.... 1,25,000 Shortfall 95,452 45,355 " The ITO levied additional super-tax of Rs. 55,112 and Rs. 32,141 50, respectively. The AAC found that " (a) the shares were quoted on the Calcutta Stock Exchange, and (b) the affairs of the company or the shares carrying more than 50% of the voting power were at no time, during the relevant previous years, controlled or held by five or less persons." The AAC then went into the question whether trusts could, be taken as members of the public. He said: " It is not really the shareholders who are registered in the share register but the beneficial owners of the shares who have to be considered. Undoubtedly, the beneficial owners are the trusts. The charitable trusts are public bodies and the income in their hands have been held to be exempt from taxation. The representative has cited the decision of the Tribunal's Calcutta Bench in th....
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....read with s. 104 of the I. T. Act, 1961 ? " We have heard elaborate arguments on behalf of both the parties. Our attention was drawn to the cases reported as CIT v. Jubilee Mills Ltd. [1963] 48 ITR 9 (SC), CIT v. G. Venkataraman [1975] 101 ITR 673 (Mad), CIT v. Amrutanjan Ltd. [1964] 53 ITR 218 (SC), IRC v. Park Investments Ltd. [1966] 43 TC 200; [1966] 2 All ER 785 (CA), Morrisons Holdings Ltd. v. IRC [1965] 43 TC 176; [1966] 1 ALL ER 789 (Ch D). It would not be necessary to go into these cases for the purpose of deciding this reference. On behalf of the department, Mr. Balai Pal has contended that the question referred to turns mainly on the construction of s. 2(18) of the I.T. Act, 1961. This provision should be construed on its plain language without taking into consideration whether that construction would create hardship for any possible case. Whatever may be the scheme, says Mr. Pal, underlying the enactment of s. 23A of the Act of 1922 or s. 104 read with s. 2(18) of the Act of 1961, it is the language of the respective provisions which has to be given effect to. Section 2(18)(b)(i) lays down: (a) that the shares of the company . (which claims to be a company in....