G.K. MITTER, J.

1. THIS is a reference at the instance of the revenue for consideration of the question as to whether the shares of the assessee company were freely transferable within the meaning of s. 23A of the Indian IT Act in view of the provision of Art. 39 of its articles of association.

2. THE assessee is a "public company" within the meaning of the expression used in the Indian Companies Act of 1913. The assessment year in question is 1949-50, the relevant previous year having terminated on 7th July, 1948. The total income of the assessee as finally determined under s. 31(3)(a) on 11th Nov., 1954, was Rs. 1,12,132. The tax thereon amounted to Rs. 49,058 leaving a balance of Rs. 63,074 available for distribution amongst the shareholders of the company. No dividends were declared at the annual general meeting held on 9th July, 1949.

For the purpose of the Indian IT Act, however, and specially under s. 23A of the Act so far as is relevant to this case, a company can only be deemed to be a company in which the public are substantially interested if its shares were at any time during the previous year the subject of dealing in any recognised stock exchange in India or w