Judgement

S. R. Das J.: This is an appeal from the judgment and order of a Bench of the Calcutta High Court delivered on a reference made by the Income-tax Appellate Tribunal under S. 21, Excess Profits Tax Act, 1940 read with S. 66(1), Income-tax Act, whereby the High Court answered in the affirmative the question of law referred to it. The question referred was:

"Whether in the facts and circumstances of these cases, the Income-tax Appellate Tribunal was right in holding that the Directors of the Respondent Company had a controlling interest in it as contemplated by S. 2(21), Excess Profits Tax Act."

2. The controversy arose between the parties during proceedings for assessment of Excess Profits Tax for five chargeable accounting periods ending on 31st December of each of the years 1939 to 1943.

3. The relevant facts which are not in dispute are these: The respondent company is a company incorporated in what was then British India having a capital of Rs.36,00,000 divided into 360,000 shares of Rs. 10 each. The Aluminum Limited, a company incorporated in Canada, held 359,790 shares in the chargeable accounting periods ending on 31-12-1939 and 31-12-1940 and 359,600 shares in the charg