Oriental Investment Co. (P) Ltd v. Commissioner Of Income Tax, Bombay

| Mareete Heat (to) fafade TAR MIE, gs (Oriental Investment Co, (P.) Ltd. Versus:| Commissioner of Income-Tax, Bombay) (10 farazaz, 1968) (Fate So eto ere, ao TET ST wo Vas sae) %efeeaa gen dea tz, 1922 are 66(1)—aeq ate fateaTSeq faraTaras sea—3 a sfraftar sat aga BS YIa FV A ata seal & Aah ge fe fee ad far & aa F lel BUS oil at cata ved || Frarftdt¢ axaat }hat 1940-41 &~ 1943-44 %Ls frateqiv lastq & fr ag| mar Pear fae aiatt ste avafeett & Afaatar (investor) & eq H ert aet ot ate ae sazeret (dealer) at otca cater et BTA afar,| attet were age at afrecy 2 adi araryaa exact 3 afrauy &.SHU za Daz,1922 st mer 66(1)% anita ae areca fir st mer 66(1)% anita ae areca fir mer 66(1)% anita ae areca fir 66(1)% anita ae areca fir anita ae areca fir ae areca fir areca fir firfrafataa seat 9 Se7 array at a7 stad } fre ite eS 1922 st mer 66(1)% anita ae areca fir st mer 66(1)% anita ae areca fir mer 66(1)% anita ae areca fir 66(1)% anita ae areca fir anita ae areca fir ae areca fir areca fir firfi ane(i) Fr area & seit site afeReafeat F Pathtet seat st Aare aafedt er srzent araat ate ar 9 (ii) Far fraiftat 'seact & stat,nfrafea a erat aofeat & fare seqa anit sie etfrat 9 arcane8 amt SeqHF scafeat ot aaom?) afte a fdsated & ZH ae fear ae Seat say A ae 66 (2) & aeta arias aats at fearfate zagqa aac at af atta H za ATT FT FE zagqa aac at af atta H za ATT FT FE aac at af atta H za ATT FT FE at af atta H za ATT FT FE af atta H za ATT FT FE atta H za ATT FT FE H za ATT FT FE za ATT FT FE ATT FT FE FT FE FE aafataaitta fear fe sigt & areare st fQeavsit ar Anat at Aasasitwer ea ff ate aeq ar fara wea dat See eaag 2 seq TAAel ata Testa (remand) ax fear ae sea aaa & afte Ft aefree ot & fore ser fi afreon frafefaa oat qx ater 66 (2)% gett.wagRTT] fate zagqa aac at af atta H za ATT FT FE zagqa aac at af atta H za ATT FT FE aac at af atta H za ATT FT FE at af atta H za ATT FT FE af atta H za ATT FT FE atta H za ATT FT FE H za ATT FT FE za ATT FT FE ATT FT FE FT FE FE a (i) aa afte & tet aafiat fi frat arrax aifiec & za Poaer atda are ff fratftdt ect avana firaieg ate dlaa agit,mfcafaat ate erat arafeelt at saaent-aradt at 2 (ii) gar fraiftat sect& BU, wierafeat ane wax aafaal | far s saya ara ae afte FTBa Ht aaha FT A AAT at aHar SY afrany + 4 o¢q seq area # fafee ar fea We Seq aAot frarttet aradt & frex Afters far| axatt 3 ca caemaa 8 x atteatadfterdt st sz @ ae cate et ad fe za carmaa 2 fea we 8 eatot faxfra fear at sae areafis dfiare see adi Aart art ale Zafar ae66 (1) & ata aga & ardaa FoSt ova qa wa H flebea fre 2 A seaaaa & fates faq art anfea fiat fe oftecy saat aaa ara aTAq SAF Rt ]. afafiatiza—(i) arate oad ale sa seit &, fad ce area4 oa faePara fine 4, ae req dat & fe a get aeaffea FF aca} oaé | Roa HITY ae z fs dae aoafrond st arga et aura wy & Fe yealaehra fear ot amar & f “aor se Reet at ada sat R fae HE avast2 Fg at? geeae Fert ag afifraitte Parafis mega ara H ara.fafea oa fat atk aca} feta sea1 ze carmaaa a gga fratant faafra fig 2 3 aafsa adi @ atc sad cae a areafae dfare‘Wh ael atJ1 wa Te yD fa H zwae 2 fh ea gedt I sa weFsala ee fear ne Ser fH fraiftdt sect A qraaa a dee at oe66 (1) & aatfna me areea Haare fear ar|oy(ii) @raqat are aT aafra watataa aeat ata ff at ara At 2zafag frarftat & xa ara at, fH stat, ofrafeat cere e fa a sayaaa aa ant ae aA arat efaat oe areare Fo wT FB wT A Hua adifrat st amar, faraa act } fac—sa fie aaa FaT aeat uxfate at ary seat ata| fay site aca & BS fafa oeat BS faash axfrat ag GAA Seq qraraa HM azy7s orafas oeat at araa afracy F| frat at Predite ara at anfec i fies seq as ae Sit ae S facada @ fe afreey a] aaa afin Pest a aaa Fadia fates faaidtal aet ade & ary feat at at adi sie za wa HY tet arat az feet etFaq aa a ais aS or ofseT ate saat afrerftar at fareareadt @ ot fe wana Fahy F yer HK Fare aqFH fae gars]Bye fae qe 13-14| aaa aaarey frga fet [1969] 1 gnota ge fafaa atlat afrarftar: 1967 )go 651 @ 6b5 aray7fara aaa | Section: CONCLUSION ORIENTAL INVESTMENT CO. (P) LTD. September 10, 1968 [J. C. SHAH, V. RAMASWAMI AND A. N. GROVER, JJ.] Indian Income Tax Act, 1922, s. 66(1)-Mixed questions of fact and law-What are-Jurisdiction of High Court in dialing with such ques-dons is the same as in dealing with questions of law-Appropriate Jann for such questions. For the assessment years 1940-41 to 1943-44 the assessee comi>anY claimed to be an investor in shares and properties and not a dealer. The contention was rejected by the Income-tax Officer, the Appellate Assistant Commissioner and the Tribunal. The company then applied to the Tri-bunal under s. 66(1) of the Income tax Act, 1922 for a reference of the following questions of law for the opinion of the High Court : (i) whether on the facts and in the circumstances of the case the assessee company can rightly be treated as a dealer in investments and properties ? (ii) w)lether the profits and losses arising from the sale of shares, secu-rities and immovable properties of the assessee company can be taxed as business profits. The Tribunal refused to make the reference and the High Court dismissed the application under s. 66(2). On appeal by special leave this Court held that the question as to what were the characteris-tics of the business of dealing in shares or tlrat of an investor was a mixed question of law and fact. It remanded the case to the High Court for directing the Tribunal to state a case under s. 66(2) on the follow-ing questions : ( i) whether there are any materials on the record to support the finding of the Income tax Officer that th,, assessee company was a dealer in shares, securities and immovable property during the assessment year in question (ii) whether the profits and los·ses arising from the sale of sharesi securities and immovable properties of the asses-see company can be treated as business property ? On these questions being referred to the High Court by the Tribunal, the High Court decided them against the assessee company. The company again appealed to this Court. It was contended on behalf of the appellant that the questions as framed by this Court did not reflect the real controversy and therefore the questions as originally framed in the company's application under s. 66(1) should be referred to the High Court in a fresh statement of case to be made by the Tribunal. HELD : ( i) The questions framed by this Court and the form in whic11 they were framed seemed to assume that the questions involved were qnestiOns of fact for it is only in regard to a question of fact that the question can properly be framed "as to whether there was material to support the said finding". This Court had itself held that the ques-tions involved in the present case were mixed questions of law and fact. Therefore the questions framed by this Court were not appropriate and did not reflect the real controversy between the parties. It was there~ fore appropriate that the questions should be modified as suggested by the appellant in its petition under s. 66(1) to the High Court. [53 G-54 ll] (ii) The proper construction of statutory language is always a matter of law and therefore the claim of the assessee that the profits and losses arising from the sale of shares securities etc. cannot be treated as profit; A of a business involves the application of law to the facts found in the setting of the particular case. In dealing with findings on such ques-tions of law and,fact the High Court must no doubt accept the findings of the Tribunal on the primary questions of fact; but it is open to the High Court to examine whether the Tribunal had applied the relevant legal principles correctly or not in reaching its final conclusion; and in that sense, the scope of enquiry and the extent of the jurisdiction of the High Court in dealing with such points is the same as in dealing B with pure questions of law. [53 B-D] G. Venkatas.vami Naidu & Co. v. C.l.T., 35 I.T.R. 594, relied on. 1962 $ to 73 qa mR fen A Hae Sey TAT F ata2 ard, 1966 & fiaa ate area F frog acter| ateareif et sz & et sz & sz & & ateareif et sz & et sz & sz & &att Taotho cas, sto gremala,(att arcteit 4)Who Wao STAT BW Bo ato ararsiet cael at attawed HEMT at Mo Fo aratt,(ait actet #)GAA - Ao WTA, WXo TaoTIE BKC ato eto Tut aaa Bt faya anarfyafa ato waeqrat 3 fear| marta UAT— '1962 % dwar 73 qa sae fadg FH aras seq matey & arta2 ytd, 1966 aH faaa & free % atta gaara aax at ae F|"otteraeqat us fifa aqdt F wa F 29 gene,1924 ayfanfare at ag at fe Tea Tah ant Faiftdt seat wer wa 21 ze Paras= 3Ty UTA WI (memorandum of association) & aw IF satya= at SA GUS FSIS 1, 2,15 We 16 FA seeq fags wT aa&| agama Pray aT 1943-44 F Say 1948.49 ag at araa & Aiea Tat1947-48 SI a9 adi21 Sea TAT F arza fee ae feted ® waarfaaiftat ead 4. raat arte et araa freafeftaa gaa fear o— “fizigar aadt F1 gee, 1925& Fax 30 qa 1928 afmaaFB ATA 1,86,47,789 age F qe se aigwma fee|ga GU B aga ae aT Gar aT H feet FA) 30 qa, 1929 gtana da Ta 7 F aiera feetaae araat t wae free fafitean faces fae fafies } ara at a aaftat a dgada ferAt Sas 104 aa aTHt aa a fac) at 1930 F fetaaradt ¢ 1,33,930 eat & sim ma fier) gate 1, 1930 & aur. 30 Garg, 1939 4 9 ant at srerafy & aera He ma adi fear Tarfra dtoste Gua weadt fafits % WF aaanftaee &, H aafias aa #, aaa free faftts % ag sig a fac me A)30 aa, 1940BY TAT Slat Tet at F ape fierfafite at ata fara aad shltwaa gteeiiz go ase sae [Fo cataTt]803 mg fred arita aateit feea fafte & fadteac erect aro daafeast ar ataa feat war ale cae ara (proceeds) it qafaftata(reinvestment) ate fiee fafiite arr art fee ae aw sigit Ftat % far fear war| fictar aeqft 3 30 qa,1941Ft aaaeet Te at H aia 2,794 eat SF aey at atm Pear at sett¢ aaa fier fafize & 2,000 eat & mq Tat au dairaBAaiRaee F & fe me| 30 Sq, 1943 es aare att aa ae Ffedtuae aradt 3 Shs fier aecdt ffs & wdfe AerBrat F 56,700 ett % qeq Ta sia a fae| zak year 30 ga,1946 st aaa ett aay TTF aha 34,954 eqt & wa ® faraae as ma aét Peat mar 1” Gat 3 (at) % ona at aaa finatita sete 3 “Set fk sac wer war? fidteax aerdt® ot wa far aSTH TAT 29 gars, 19243 Bax 30 qa, 1942 ae at memahy% aha iat sr ae ara Awa adi gar| 30 ga 1929 st aeraeet att ah H 1,29,333 ech & get et fim rar wn featate fier faite % 45,000 eat % qeq ata sig aetarftare 3%aeeat at fae fire ae silt 30 aa, 1931 et ama Aa Ta as83,833 eat e qe R sia, HT ose B wa Fe Pea Per ae4, fedhracaeaat & eqararat at sa sare fae arma: ofan(repayment in part) a fea ame ait 7,48,356 wo qeqFR sigRUTH BN aged fee me YS fre sas des a fea mEfaite30 Faq, Fact 1943 st afte agar AA & ata Ta aga ffter fo fret eto & daseqa aus afte Haat.Bl aa aeaT sre ae fear sida aah feat F fietaaxerat ae dga se fir & afteett & Farah st marge zfew me 1”?.| fratftdt erat 31940 & see age ae ara feat at fe safrfratat atte azafeett sr saqentt(dealer)atar anc)fireq sttatcofraftatJ ca cate st adi ara ar ale1939-40 & featea at aePratftdt setdt ar Prateq fafaatar (investor)} eq Ff feat starterON fea det ata drat 2 fi smaax fem} 1940-41,1941-42 aie1942-43 & Prete ant & faq Praiftdt saat at ae alter ara aft Best stat, ctrafedt siz eae atufe & cqaent Beg FH avar ate set wT% sear Pirated fear za ast & fare ate 1943-44 F Fraley ath & fae 804 estan eararaa frqe ofrer —[1969] 1 emefixoqe Rraiftet eradt A zet wo watq svat woh wot Patt daeat | freq 1943-44 at & fac fact arg sea R gear fraifedt ecta goat facet asa & at ae 7 ma, 1944 at we gated fretqe cata 23 ge isa Mt fH ae cazertt adi afes Baa cm fafrarar ZIsat tah ot ata 6 ar,1944 are we va age fit farfarafafaa sara fat war aT—- CrvrL APPELLATE JURISDICTION: Civil Appeals Nos. 651 to 655 of 1967. Appeals from the judgment and order dated March 2, 1966 c of the Bombay High Court in Income-tax Reference No. 73 of 1962. S. T. Desai, D. Dwarkadas and S. S. Javali, for the appellant. C. K. Daphtary, Attorney-General, R. Gopalakrishnan, R. N. Sachthey and B. D. Sharma for the respondent in all the appeals. D The Judgment of the Court was delivered by Ramaswami, J. These appeals are brought by certificate from the judgment of the Bombay High Court dated March 2, 1966 in Income Tax Reference No. 73 of 1962. The appellant company, hereinafter called the assessee com-E pany, was incorporated on July 29, 1924, as an investment com-pany, the objects of which are set out in cl. III of the memorandum of association and more particularly in sub-els. 1, 2, 15 and 16 of that clause. The assessment years in question are 1943-44 to 1948-49, excepting the year 1947-48. According to its petition made in the High Court, the assessee company dealt with its assets. F as follows: "The petitioner company purchased during the period 1st July, 1925 to 30th June, 1928, shares of the value of Rs. 1,86,47,789 major portion of which was com-prised of shares in the Sassoon Group of Mills. During the year ended 30th June, 1929, the petitioner company G promoted two companies known as Loyal Mill~ Ltd., and Hamilton Studios Ltd. and took over all their shares of the value of Rs. lOt lacs. In the year 1930, the petitioner company pnrchased shares of Rs. 1,33,930. During the period of 9 years from 1st July, 1930, to 30th July, 1939, no purchases wen: made with the H exception of a few shares of Loyal Mills Ltd. taken over from the staff of E. D. Sassoon & Co. Ltd., who retired from service. In the year ended 30th June, 1940, reconstruction scheme of the Appollo Mills Ltd. took place under which debentures held by the petitioner company in the Appollo Mills Ltd., were redeemed and the proceeds were reinvested in the new issue-of shares made by the Appollo Mills Ltd. Out of the purchases of the value of Rs. 2, 794 made by the petitioner com-pany during the year ended 30th June, 1941, Rs. 2,000 was the value of shares of the Loyal Mills Ltd., taken over from the retiring staff. In the year ended 30th June, 1943, the petitioner company took over from the David Mills Co. Ltd., shares of the Associated Building Co., of the value of Rs. 56,700. After this there were no purchases at all to this date excepting purchases. of the value of Rs. 34,954 during the year ended 30th June, 1946." The sales are contained in paragraph 3 (b) which states: "Iu relation to the purchases made by the petitioner company as stated above no appreciable sales of shares were made during the period 29th July, 1924 to 30th June, 1942, the sales made in the year ended 30th June, 1929, of the value of Rs. 1,29,333 included shares of the value of Rs. 45,000 in the Loyal Mills Ltd., sold to the members of the staff and shares of the value of Rs. 83,833 representing sterling investments handed over to the creditors of the petitioner company in part repay-ment of the loan taken from them in the year ended 30th June, 1931, shares of the value of Rs. 7,48,356 were handed over to the creditors in payment of the loan granted by them. From the year ended 30th June, 1943, E. D. Sassoon & Co. Ltd., started relinquishing the managing agencies of the various mills under their agency and the shares held by the petitioner company in the Sassoon Group of Mills were handed over to the respective purchasers of the mills agencies." Carqat& ate 25 we, 1943 Tea Ts aa Fa By atFy facet tar at we at Sa1940-41}frateq FH araee anlararu fea ac za fafaaa(ruling) & agatha dare feat wat aTfe seat at Rrateq fafrarat & caaerdt F wa | few star alee|sa fat & geqa a SAR wea Feta ase ANE (CentralBoard of Revenue) 3 a@ fafacaa feat ft erat on fafaarataqiwH FTA} (investment holding company)= ae aftergape Dea daz Barer 22(1)% ala ga any at a dalla'facat cad ara gega st st cetaie Get We 1943-44 ar fraieTararfta dat afte pits ae cae 2 fe za fafiesea qe tar aeat agar fi tata ofizr faa (afters ae) tae} fae oatat ooftafa wa at atte araae & fer gadt saftafe et 1” Praftat arqdt A ae alter et at fe sat stat, sfaeyaat aTacataat & maar ima et eet as sae adi featati za cela F\arta % fraiftat aeact 2 Gata ase ae F arta 18 wma, 1943ae ga waa a ae faa at at tata ofc tea Cae at TT261) & arta afta fer war at aaa offers za aale Madi arat wie ae afuPratfta feat fs Pratat (investments) st fraifedterqdt HI Sa HA F sATT- erm (stock in trade) F WIHF agaacat at fea se fagat$ dua ate sas wea ga TG Fat aa cetaft| frathtat seqdt 9 arctet aere ara & cant atte at1 Sat waleafta ax at ale aaa anfear & ata a sez war agaerad Frat+ aaa aritet APT HTT (Income-T'ax Appellate Tribunal) & atte atANT Saat WT A ahraey s ang zat aM ta stas| attat ahaa faatitdt & ce ert ay anda ae fear fe faaiftdt watt ware aead ait arate yeas a HAS are aGNa stat, aati aieerat arafa B oqzant& wee cha ae wtataitet aera aeafufraite fear fis raid aeqct S maa Fa tae dae area& eaeet fafrardt ar sae att at af sara at az e. aft aq at ata dae area& eae area& eae& eae eae: aft aq at ata aq at ata at ata ata/ apfrea gtraie a> sraet sae [ere Tea] =— 805 agt agar 3 frag Sirarat aie arafeat & sqqertt & BIG a eatvat 2| oftqraered aia A 7 afufratta fee fi fararftdt saat—stait, ofrgReit ale acaedt at caaentaie ater citsat| zasere Rraitdt erat & free aaa a ST fifacay gar aT ae faraferfiaaareal WAT —c(1) ag f faaiftedt & ae arar feat arf 9e smartat fafsratat (investor)@ Faife sad erat sare at wzat aaure fire 4, wie|. (2) 3¢ fe aan WIA A Beas SALA S BW aye fiseaat H saat Aa & fre fae ae greatHTT fraritet eratay fatraar & wa Ht afataaifta adi feat ar awa 1” zag uate fraiftdtweadt atcRtazqqwaz,1922fat cal zeh amt daz sera @, st ar 66 (1) % witaadtatafar & za aa % fan araaa Par fe farafafaa fats & agat ae Serqa Bt UA Waa % fae fez fear SIT— c(i) gar area % aett ate afeRafeet & fraiftdt saat at.ererqrat wie aeafaat B caged B wa H aaa ste z, BK (ii) ear sig, sftaeat ae aat fratitdt seal & salt,sfiated ax enae aafeat & fare aqua at ae ait atearta ae areare } anit Bea | severe fea st amar SV” atet stay tga wea 1 ee are Ie aay ae feat FFsak mea a are fae ar aea saya adh Aat| aa fraiftdt seat 4-dae at wi 66 (2)% adla art seq rary H OH Brae PAT|seq aaa ze waar F Hoa ante 15 ga, 1952 ga maT aaniac ac Rati agua faaifidt aseadt A ga eararay A adter ara wtfae canta afta ae oft1 ze earqtery F atdta 22 wz, 1957 are waefrata & za acter FT aay ae feat AE gras THT HATA F atta 15 Fa,1952 aia agar ay ararea ae feat| Ze eae A ae Fer at fH atasafer a 7g fer fread a fe fraiftat eaaeret av ate fafratar aiaq, at qa aeat ar eer fat2 wate da aa H suai sera, weSraiftet exact gre figa ast # feat war ae seat fH ae fafa aXargteal a1 eqaert at ante Baer farsa adiar| Ze swaraa a Fe Aacae feat fe ae ce pe fe seadt waa seat & sata fafrarat, ataitsix arafaat at eqaere acct ot, sa sat caaent st efaaa sei et wT 806Sosa trated Fata are? [1969] L eqoftoqo Prior to 1940 the assessee company made a claim every year for being treated as a dealer in investments and properties but this contention was repelled by the Income Tax authorities and upto the assessment year 1939-40 the assessee company was G assessed on the basis of being an investor but it appears that for the assessment years 1940-41, 1941-42 and 1942-43 the Income Tax department accepted the plea of the assessee company and treated it as a dealer in shares, securities and immovable pro-perties and assessed it on that basis. For these years and for the assessment year 1943-44 the assessee company made its return . H Qn that basis. But after the return had been filed for the year 1943-44, the assessee company withdrew its return and filed a revised return on March 7, 1944, contending that it was not a A dealer but merely an investor. Along with the return it filed a letter dated March 6, 1944 in which it stated: "The return of Total Income which was submitted with the Company's letter of 25th May 1943 was pre-pared in conformity with the ruling of the Income-tax Officer in the 1940-41 assessment that the company was to be assessed as a dealer in Investments. Since that return was submitted the Central Board of Revenue has decided that the Company is an Investment Hold-ing Company, and accordingly an amended Return of Total Income under Section 22 ( 1) of the Indian Income-tax Act is submitted herewith on which the assessment for 1943-44 may be based, as on this parti-cular question the company obviously cannot have one status for Excess Profits Tax and another for Income-tax." It was contended by the assessee company that it never carried on any business in the purchase or sale of shares, securities or properties. In support of this contention the assessee company relied on the order of the Central Board of Revenue dated August 18, 1943 passed under s. 26(1) of the Excess Profits Tax Act. The Income Tax Officer rejected the plea and held that the investments were held by the assessee company as the stock-in-trade. of its business which it carried on during the previous year and also in the preceding years. The assessee company took the matter in appeal to the Appellate Assistant Commissioner who dismissed the appeal and upheld the order of the Income Tax Officer. The assessee thereafter appealed to the Income Tax Appellate Tribunal and the same contentions were urged on behalf of the assessee company. The Appellate Tribunal rejected the assessee's claim that it was showing itself as a dealer in shares, securities and immovable properties under a misapprehension and without appreciation of the correct facts. The Appellate Tribu-nal held that in the case of the assessee company not only the Memorandum of Association gave the power to the company to deal in investments but the case of the company all along in the past was that it was a dealer in investments and properties. ·Consequently, the Tribunal held that the assessee company was :a dealer in shares, securities and properties and dismissed the appeals. Thus the grounds on which the case was decided against the assessee company were ( 1) that the assessee claimed to be a dealer or an investor according as it incurred losses or made profits and ( 2) that because of the objects contained in the memorandum of association and because of its assertion made in the past as being a dealer the assessee company could not be held to be an investor. The assessee company then applied to the Appellate Tribunal under s. 66 (1 ) of the Income Tax Act, 1922, ~ereinafter called the 'Act' for a reference of the following ques- · A hons of law for the opinion of the High Court : "(i) Whether on the facts and in the circum-stances of the case the assessee company can rightly be treated as a dealer in investments and properties; and (ii) Whether the profits and losses arising from the sale of shares, securities and immovable properties of the assessee company can be taxed as business profits." eatat| aaft ag afReafe adaa2 fig ae Rreatae al 2 fama \ot wad faa ¥ ae aarat ot fe sait & area a fadsatert et at fafraraar|4 fata er wea avy ale AR at Bre gga 2 Ae atet aay fia aett at araa Gea? ese on saat eat ifs mura a at gatSat Teeaed fralftat asagert ar AP aTar HE GT hat SASGa far er Ika at| aaa za eA A aleay } mea & saafrafetad a fat & oza tetra fee %“Q) er afta 4 tet 2 eat 2 feed aaa arfeac 2a faved at anda dat & fe fraiftdt exact aeana Prarey ay chera salt, afta ate enax aca at saaerd of 9 %(2) eat fraittal araett & stat, ofafeat site ena arated fama @ saya anit aie esa ae grea & anit & @7 F soafeat St eat at 9”?SO 7AG Ae aaa Set aT BY Zaft mfesfia (remand) fatTaSea aE adtet sie a ae Ate 2 fe ahreey seefate % aga oe aTHe oT Ga dee at aT 66(2) & ata att zaaASfreIs age a adtet afseeq a ade 12/13 aa, 1962maa,i Ga far | ag freer 1962 at dem 73 grat agar faa at ae seaFara yt Tat Eras ah| seq rare Ft arta 2 art, 1966 wa Aasfra H za dat oat ar sae fraittdt anal & Pree ae aaa ara &aq Ht fear||° frratftdt seqaft at ate Bolt cao fhe Bas a ae ad feat fe earPraiftet seeadt fSBrarat ate acahedt at craze aa aralt eager at atwag daa fafaaat ata sea at feta dergertt to aafraddter(scrutiny) w frie 2 aie ae etter sa afRafit ar mace ah atsyat aifeg frat ma aie for & dat dezaere fey ae| aft dozerat alan set Fuca ag vat aaa 2 fs rathdt & arcane at eq wamat aie fafaarat ar sagere aear at at Pde Pratt st eater ararsaat| Peg afe gah fata deagerdt& az waz Har? 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The assessee company then made an application under s. 66(2) of the Act to the Bombay High Court which dismissed the application by its order dated June 15, 1952. The assessee company there-upon obtained special leave to appeal to this Court. The appeal was allowed by this .Court by its judgment dated May 22, 1957 and the order of the Bombay High Court dated June 15, 1952 was set aside. It was pointed out by this Court that the Appellate Tribunal in arriving at its finding that the assessee was a dealer and not an investor, had relied on two basic facts, viz., the objects set out in the Memorandum of Association and the previous assertion made by the assessee-company that it was a dealer in investments and properties and not merely an investor. It was observed that merely because the company had within its objects the dealings in investments, shares and properties the circumstance did not give it the characteristics of a dealer in shares. The circumstance, though relevant, was not conclusive. It was pointed out in the judgment of this Court that the question as to what were the characteristics of the business of dealing in shares or that of an investor was a mixed question of fact and law and what was the legal effect of the facts found by the Appellate Tribunal and whether as a result thereof the assessee could be termed a dealer or an investor was itself a question of law. Ac-cordingly the Court formulated the following two .questions of law as arising out of the order of the Tribunal : " ( 1) Whether there are any materials on the record to suPPOrt the finding of the Income Tax Officer that the assessee company was a dealer in shares, securities and immovable property during the assessment year in question? (2) Whether the profits and losses arising from the sale of shares, securities and immovable properties of the assessee company can be taxed as business profits ?" The case was therefore remanded to the High Court for directing the Appellate Tribunal to state a case on the aforesaid questions of law under s. 66(2) of the Act. In accordance with the direc- tion of this Court the Appellate Tribunal made a statement of the · case on June 12/13, 1962. The reference being Income-tax Reference No. 73 of 1962 was heard by the High Court which by its judgment dated March 2, 1966 answered both the questions · against the assessee company and in favour of the Commissioner of Income Tax.