Judgement

Appeal (No. 37 of 1929) from a judgment and order of the High Court (March 13, 1928) upon a reference under s.66, sub-s.2, of the Indian Income-tax Act, 1922.

The following facts appeared from the reference and the documents annexed thereto. The Hong Kong Trust Corporation (hereinafter referred to as "the Hong Kong Company ") was incorporated in Hong Kong with the object of carrying on the business of bankers and financiers, and was resident in Hong Kong. The respondent company was incorporated as a private company at Bombay with similar

Law. Rep. 57 Ind. App. 49 ( 1929- 1930) Commissioner of Income Tax, Bombay v. Bombay Trust

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objects. During the years of assessment—namely, those ending on March 31, 1925 and 1926—the Hong Kong company had lent to the respondent company large sums on deposit at 5J per cent, interest. The advances constituted substantially the whole of the available capital of the Hong Kong Company, including both its paid up capital and money deposited with it. The respondent company remitted the interest due to the Hong Kong Company.

Under a notice pursuant to s. 43 of the Act served on the respondent company, it was held that that company was to be d