Judgement

SIKRI, J. : These appeals by special leave are directed against the judgment of the High Court of Kerala in a reference made to it by the Income-tax Appellate Tribunal, Madras Bench, under S. 27 (1) of the Wealth-tax Act, 1957, hereinafter referred to as the Act. The reference was made at the instance of the Commissioner of Wealth-tax, Kerala, and the question referred was as follows:-

"Whether the exemption from tax for the assessment years 1957-58, 1958-59 and 1959-60 was not rightly granted."

2. The High Court held that the exemption from tax granted to the assessee under S. 45 (d) of the Act for the assessment years 1957-58. 1958-59 and 1959-60 was not rightly granted , and answered the question against the assessee. The relevant facts are as follows: The appellant, Travancore Cochin Chemicals (P) Ltd., hereinafter called the assessee, was formed and registered under the Indian Companies Act on November 8, 1951. The prior history of the Company is given in the statement of the case as follows:-

"On 22-7-1949, a partnership was formed between two public limited companies, viz., Fertilisers and Chemical Travancore Ltd., Alwaye, and the Mettur Chemical and Industrial Corpora