P.K.GOSWAMI, J.

(1) THESE two appeals by special leave are directed against the common judgment of 14/03/1969, of the Patna High court in the matter of two references under S. 66(1) of the Indian Incometax Act, 1922, relating to assessment years 1953-54 and 1954-55 of the respondent (hereinafter to be referred to as the company).

(2) THE case has a rather chequered history as will appear from the facts narrated below.

(3) THE company at the material time was a private limited company and at the end of the relevant previous years, namely, 31/08/1952 and Au 31/08/1953, the shareholding was as follows:

Number

of shares on:

August 31, 1952

August 31, 195:

1.

Sri Ashok Kumar Jain,

Managing Director

.. 10,000

10,000

2.

Sri R. Sharma, Director.

10

10

3.

Sri N. C. Jain, Director.

10

10

4.

Sri S, P. Jain

.. 10,000

10,000

5.

Smt. Rama Jain

.. 10,000

10,000

6.

Sri Alok Prakash Jain

.. 10,000

10,000

7.

Rishabh Investment Ltd.

.. 5,000

5,000

8.

Dalmia Jain Co. Ltd.

.. 2,000

2,000

9.

Universal Bank of India Ltd.

980

980

10.

Ashoka Agencies Ltd.

2,000

2,000

50,000

50,000

Of these shareholders Rama Jain is the wife of S. P. Jain and Alok Prakash Jain and Ashok K