Law:

Section:

Section 104 of the Income-tax Act, 1961 [Corresponding to section 23A of Indian Income-tax Act, 1922] – Additional income-tax on undistributed profits of certain companies – Assessment years 1956-57, 1959-60 and 1960-61 – More than 50 per cent of shares of assessee-company was held by a company in which public were substantially interested – Whether for assessment year 1956-57, law had to be applied as it stood before amendment of section 23A of 1922 Act and, therefore, for that assessment year, assessee-company could not be treated as company in which public were substantially interested so as to take it out of pale of section 23A of 1922 Act – Held, yes – Whether since all three conditions laid down in Explanation to section 23A of 1922 Act as amended by Finance (No. 2) Act, 1957 were satisfied for subsequent two years, section 23A of 1922 Act could not be applied to assessee-company for those two years – Held, yes FACTS More than 50 per cent of the shares of the assessee-company was held by one single entity, namely, the SEL. The ITO took the view that the assessee-company was one to which the provisions of section 23A of the 1922 Act applied. According to him, the company did not fulfil the requirements of a company in which the public were substantially interested as given in the Explanation to the section 23A of the 1922 Act. He also took the view that the shares of the company were not freely transferable since the directors were vested with absolute discretion in the matter of registering share transfers. Consequently, according to the ITO the company did not satisfy the requirement of the Explanation ( b)(ii) also, with the result he applied the provisions of section 23A of the 1922 Act to the assessee-company. The AAC allowed the assessee's appeal on the ground that section 23A of the 1922 Act was not applicable to the assessee-company. The Tribunal, however, held that the provisions of section 23A of the 1922 Act applied to the assessee-company. On reference: HELD A perusal of the relevant statutory provisions will clearly show that for a company to be treated as a company in which public are substantially interested, it has to satisfy all the…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492