Judgement

SIKRI, J.: This is an appeal by certificate of the High Court of Andhra Pradesh against its judgment dismissing a petition filed under Art. 226 of the Constitution by the appellant. The appellant is a Private Limited company, hereinafter referred to as the Company, and three persons hold shares of the Company as under:

Shares Amount

Rs.

Sri C. P. Sarathy Mudaliar 2797 27,970

Sri C. P. Singaram 420 4,200

Sri C. P. Doraiswamy 500 5,000

The Company was doing transport business and for the assessment year 1959-60 (Previous year ending 31st March, 1959), it claimed a sum of Rs. 48,600/- as development rebate in respect of the four new buses purchased by it and brought to use during the year. The Income Tax Officer disallowed the amount but the Appellate Assistant Commissioner, on appeal, allowed the entire sum of Rs. 48,600/- as development rebate On May 27, 1959, the three shareholders entered into a partnership and the capital of the firm was as follows:

Rs.

C. P. Sarathy Mudaliar 25,000

C. P. Singaram 10,000

C. P. Doraiswamy 10,000

Total 45,000

On June 30, 1959, the Company passed a resolution transferring a number of motor buses, including the four in respect of which develop