Judgment

KHANNA, J. :- This judgment would dispose of Civil Appeals Nos. 1748 to 1750 of 1968 filed by special leave against the judgment of the Calcutta High Court whereby the question referred to that Court under Section 66 (1) of the Indian Income-tax Act 1922, hereinafter referred to as the Act, was answered in favour of the revenue and against the appellant company.

2. The appellant, a private limited company, was incorporated on January 25, 1955. The objects for which the Company was established were given in the clauses of Paragraph 3 of the Memorandum of Association. A number of business activities were mentioned in those clauses. Clauses 6 and 7 of that paragraph were as under :

"6. To purchase take on lease or otherwise acquire and to hold, cultivate, improve, lease, sell, exchange, mortgage, or otherwise, dispose of land, houses, mines, minerals, mining and other real and personal property and to deal with the same commercially.

7. To develop the resources of the same property by building, reclaiming clearing, draining, and otherwise improving framing and planting on any terms or system that may be considered advisable."

3. With effect from February 5, 1955, the appellant co