Judgement

RAMASWAMI, J.: This appeal is brought, by special leave, on behalf of the Commissioner of Income-tax against the judgment of the Bombay High Court dated September 18, 1962 in Income Tax Reference No. 34 of 1961 whereby the High Court held that the order passed against the respondent, hereinafter referred to as the assessee under Sec. 23A of the Indian Income Tax Act, 1922 (hereinafter referred to as the "Act ) was not justified and valid for the assessment year 1951-52.

2. The assessee is a public limited company registered under the Indian Companies Act. Its share capital consists of 50,000 shares subscribed and paid up. Out of these shares, 47,493 are held by Shree Raghunath Investment Trust Ltd., a company incorporated as a private company under the laws of Jammu and Kashmir (hereinafter referred to as "The Jammu Co.") and having its registered office there. Out of the remaining 2507 shares, 2500 shares were held by another private limited company incorporated in India and having its registered office in New Delhi and the remaining 7 shares were held by seven individuals. The shares of the assessee are not quoted on the Stock Exchange any where in India. There is nothi