Judgement

Appeal (No. 36 of 1929) from a decree of the High Court dated March 5, 1928, upon a reference to that Court by the Commissioner of Income-tax, Bombay, under s. 66 of the Indian Income-tax Act, 1922.

The reference was made under an order of the High Court in the circumstances stated in the judgment of the Judicial Committee.

The first of the three questions ultimately referred, which was alone the subject of the present appeal, was " Whether the Commissioner of Income-tax was not bound in law to take as the price paid for the Burma Corporation shares the nominal value of the shares allotted by the petitioner company in payment therefor." The Commissioner was of opinion that the question should be answered in the negative. He found that the value of the appellant companys shares when allotted was not more than Rs.98.

The High Court answered the above question in the negative. The learned judges (Marten C.J. and Kemp J.) were of opinion that In re Wragg ([ 1897] 1 Ch. 796.) was distinguishable, and that it was open to the Court to ascertain the true value, which was not more than Rs.98, and that there had been no loss to the appellant company from the transaction. In answer