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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION

INCOME TAX APPEAL NO.226 OF 2006

The Commissioner of Income Tax

..Appellant

Vs.

M/s.Papilion Investments Pvt. Ltd.

..Respondent

Mr.Suresh Kumar for appellant.

CORAM :- V.C.DAGA &

J.P.DEVADHAR,JJ.

DATE :

28TH AUGUST, 2009

P.C.

1.

Heard learned Counsel for the parties.

2.

The Tribunal, in paragraph No.9 of its order, has recorded a categorical

finding, which reads as under:

9.

In the case before us, and in view of the provisions of the Companies

Act,1956, it is not possible for the PFIPL to have less than two shareholders. As

a matter of fact, there cannot be any company in India which has less than two

members i.e. shareholders. Now the requirement of Section 47(v) is that the

whole of the share capital of the subsidiary company should be held by the

holding company. The whole of the share capital being held by the holding

company is certainly not the same thing as whole of the share capital being

held in the name of the holding company. In fact, that situation is a legal

impossibility in India. In case one is to