Per R.V. Easwar, J.M.—Facts : The assessee in these appeals is Raymond Limited, a public limited company engaged in the manufacture of suitings, engineers’ steel files and rasps and cement in India. In order to muster funds for the purpose of putting up facilities for the production of cold rolled steel products including silicon products, the Greenfield Textile project and the normal capital expenditure requirements, the company proposed to issue Global Depositary Receipts (GDRs) in the international market. Two types of GDRs were contemplated - (1) International GDRs which were offered to investors outside the United States of America (USA) and India restricted to offshore transactions and (2) GDRs under Rule 144A of the Securities Regulations of the USA, offered in the USA to "qualified institutional buyers" (QIBs). The total number of GDRs issued was 37,68,844. The issue price of each GDR was US $ 15.92. Each GDR represented 2 shares of the company of the face value of Rs. 10 per share. Approximately US $ 58 million were expected to be collected by the issue of the GDRs.

2. On 9-11-1994, certain documentation took place in connection with the issue of GDRs. Firstly, an agreement styled "subscription agreement" was entered into between the assessee-company on the one hand and (1) Merrill Lynch International Limited (2) Goldman Sachs (Asia) Limited and (3) DSP Financial Consultants Limited, on the other. Copies of this agreement are placed at pages 107 to 149 of the paper-book filed by the assessee. This agreement provided in detail for the rights and duties of the concerned partners vis-a-vis the GDR issue, warranties, approvals to be obtained, deliver)’ of GDRs, payment, opinions to be obtained, commission payable to the managers of the issue and so on and so forth.

3. Secondly, an agreement styled "managers’ agreement" was entered into on 9-11-1994 between Merrill Lynch International Limited on the one hand and (1) Goldman Sachs (Asia) Limited (2) DSP Financial Consultants Limited (3) Banque Paribas (4) Barclays de Zoete Wedd Limited (4) Bear, Stearns International Limited and (5) Swiss Bank Corporation, on the other. Copies of this agreement are placed at pages 9 to 13 of the paper book No. 1 filed by the Department. This agreement provided for the regulation of the inter se relationship between the managers of the issue.

4. Thirdly, on the same day, an agreement was entered into between the assessee-company and Citibank N.A., which acted as the Depository. This agreement was styled "Deposit Agreement" and copies of the same are at pages 14 to 29 of the Department’s paper book No. 1. Nothing much in this agreement is important for the purpose of this case.

5. Fourthly, a "Deed Poll" was entered into by the assessee-company in favour of the prospective purchasers of the GDRs which is placed at pages 28 & 29 of the Department paper book No. 1. Nothing much in this agreement is important for the purpose of this case.

6. Fifthly, on the same day an "Offering Circular" was issued, containing details about the assessee-company, investment considerations, market price information, terms and conditions of the issue of the GDRs, the form of the GDR, government approvals, taxation, financial operations and results and so on and so forth. This is in the nature of a prospectus issued by companies in connection with the issue of shares. The offering circular is placed at pages 151-301 of the paper book filed by the assessee.

7. Before we proceed further, it may be of some use to know the meanings of certain words used in this case. A GDR (Global Depositary Receipt), according to the Compendium on SEBI Capital issues & listing authored by Dr. K.R. Chandratre and others, "is an instrument that is in the first instance made in the form of ‘Receipts’ and which is based on underlying ordinary (equity) shares of the issuer company". "Global" means world wide, "Depositary" means a place where something is deposited for safekeeping (such as