Judgment

VENKATARAMIAH, J.:- Since these appeals by certificate involve a common question of law, we find it convenient to dispose them of by this common judgment.

2. Civil Appeal No. 2501 of 1972 is filed against the judgment of the High Court of Bombay in Income-tax Reference No. 58 of 1963 and Civil Appeals Nos. 2502-2504 of 1972 are filed against the judgment of that High Court in Income-tax Reference No. 87 of 1963. The assessee, M/s. Sessoon J. David & Co. Pvt. Ltd. (hereinafter referred to as the Company) is the appellant in all these cases and the assessment years are 1957-58, 1958-59, 1959-60 and 1960-61, the relevant calendar years being 1956, 1957, 1958 and 1959 respectively.

3. The Company is an investment company and its shares were originally held either directly or through their nominees by Sir Percival David, Lady David and Mr. V. P. David (hereinafter collectively referred to as Davids). The issued capital of the Company consisted of 1000 ordinary shares of the face value of Rs. 10,000 each. According to the valuation made by the auditors, the assets of the Company were worth Rs. 155 lacs as on December 31. 1955. At a meeting of the directors of the Company held on De