Judgment

SHAH, J.: Explanation to S. 23A (i) of the Indian Income-tax Act, 1922 before it was amended by Finance Act 1955 (in so far as it is material for the purpose of these appeals) provided:

"A company shall be deemed to be a company in which the public are substantially interested if the shares of the company ... carrying not less than 25 p. c. of the voting power had been allotted unconditionally by and are at the end of the precvious year beneficially held by the public (not including a company to which the provision of this section applies), and if any such shares have in course of any previous year been the subject of dealings of any stock exchange in the taxable territories or are in fact freely transferable by the holders to other members of the public."

2. For a company to be deemed a company in which the public are substantially interested, two conditions must co-exist, (1) the shares of the company carrying not less than 25 p. c. of the voting power must have been allotted unconditionally to or acquired unconditionally by the public, and (2), (a) that any such shares have in course of the previous year been the subject of dealings on any stock exchanges, or (b) that the