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The Income Tax Reports - A Journal of the Law of Income Tax and Super Tax of India and Pakistan with Select English Cases

1951

From the findings of the Appellate Tribunal it is clear that the whole of the proceeds of the sale of the Indian Iron and Steel Company Limited shares was utilised for payment of the first instalment of the shares taken up by the assessees in the Assam Bengal Cement Co. [...] The third head of the memorandum professes to state the objects of the company and in head (6) of this enumeration occur the words 'to vary the investments of the company and generally to sell exchange or otherwise dispose of deal with or turn to account any of the assets of the company.' It is true that the doing of any of these things might be incidentally necessary in the conduct of the b [...] It acquired the controlling interest in the Assam Bengal Company Limited and eventually the interest of the managing agents of that company namely the Eastern Corporation Limited by the purchase of shares from the proceeds of the sale of other shares held by the company. [...] The sale of the old securities was an essential part of the business of financing and the sale of the securities was a normal step in the conduct of such business. [...] It may be that all the reasons given by Manohar La11 J. are not sound but the decision rests upon the finding that the sale of the securities was a part of the business of the assessees and was made with a view to increasing the profits of the assessees.
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