JUDGMENT

R.F. Nariman, J.

The present appeal relating to assessment year 1995-96 is by one Shri Shiv Raj Gupta, who was the Chairman and Managing Director of M/s Central Distillery and Breweries Ltd. (hereinafter referred to as "CDBL"), which had a unit in Meerut manufacturing beer and Indian Made Foreign Liquor (hereinafter referred to as "IMFL"). The facts leading to an appreciation of the issues raised in this appeal are as follows.

2. By a Memorandum of Understanding (hereinafter referred to as "MoU") dated 13.04.1994, made between the appellant and three group companies of M/s Shaw Wallace Company Group (hereinafter referred to as "SWC group"), the appellant, his wife, son, daughter-in-law and two daughters were the registered holders of 1,86,109 equity shares of INR 10 each constituting 57.29% of the paid-up equity share capital of CDBL listed in the Bombay and Delhi Stock Exchanges. The break-up of the shares held by the family members of the appellant and the appellant himself are as follows: