CHAKRAVARTTI, C. J.

( 1 ) THE principal point involved in this appeal has been called by the learned trial Judge a point of first impression. It is undoubtedly a point which has never arisen before and that was perhaps because no one ever thought of raising a point of this character.

( 2 ) THE facts are as follows. The respondent, Anglo-India Jute Mills Co. , Limited, is a company incorporated under the Indian Companies Act and carries on business in India. In 1947, the company purchased the entire share capital in Landale and Clarice Limited and the second largest lot was purchased from Clive Investment Trust Co. , Ltd. , a Sterling Company registered in the United Kingdom, The transaction concerned 1,900 Preference Shares, purchased at the rate of Rs. 135 per share and 2,450 Ordinary Shares, purchased at the rate of Rs. 332-8-0 per share. The total price paid by the respondent company to its vendors for that lot of shares was Rs. 10,71,125. Out of that sum, the respondent company retained in its hands an amount of Rs. 1,48,812-8-0. It is said that parties to the transaction thought that the profit made by the vendovs out of this deal might attract the Capital Gains Tax and sinc

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