Judgement

MAHAJAN C.J.I. : This appeal is preferred against the judgment of the High Court of Punjab at Simla, dated 18-6-1951, delivered on a reference under S. 66, Indian Income -tax Act, whereby the High Court answered the following two referred questions in the affirmative :

" 1. Whether on a proper construction of the relevant clauses of the Appellant Company s Memorandum of Association and Articles of Association and on a consideration of the circumstances in which the shares of the Sarswati Sugar Syndicate were purchased and sold, it could be held that the purchase and sale of such shares was a part of Appellant Company s business deal?

2. Whether in the circumstances of the case, the excess of Rs. 20,000 realised in the assessment year 1942-43 and Rs. 2,26,700 in the year 1944-45 was a revenue receipt chargeable to tax under S. 3, Income-tax Act, and was not a mere appreciation of capital?"

2. The questions arose in the following circumstances: The assessee, a Public Limited Company, which is the appellant before us, was formed in 1917 with the following objects :

" (a) To undertake and carry on the general business and trade of commission agents. Insurance Agents, Commercial Ag