TMI Blog1985 (8) TMI 272X X X X Extracts X X X X X X X X Extracts X X X X ..... ulating the rate of bonus payable to the workmen of the Associated Rubber Industry Ltd. The appeal is allowed with costs and it is declared that the workmen of the Associated Rubber Industry Ltd., Bhavnagar, are entitled to be paid bonus at the rate of 16% for the year 1969. Appeal allowed. - 1429 OF 1975 - - - Dated:- 19-8-1985 - O. CHINNAPPA REDDY AND V. KHALID, JJ. M. K. Ramamurthy and J. Ramamurthy for the Appellant. G.B. Pai, D. N. Mishra and Ms. Meera Mathur for the Respondent. JUDGMENT Chinnappa Reddy, J. The workmen of the Associated Rubber Industry Ltd., Bhavnagar, are the appellants in this appeal filed pursuant to a certificate under article 133(1) of the Constitution granted by the High Court of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with the Associated Rubber Industry Ltd. The workmen of the Associated Rubber Industry Ltd., Bhavnagar, raised an industrial dispute claiming that they were entitled to be paid bonus at the rate of 16% for the year 1969. According to them, the transfer of the shares of INARCO Ltd. to Aril Holdings Ltd. was no more than a device to avoid payment of higher bonus to the workmen. The Industrial Tribunal and thereafter the High Court of Gujarat under article 226 of the Constitution held that the Associated Rubber Industry Ltd. and Aril Holdings Ltd. were two independent companies with separate legal existence and, therefore, the profits made by Aril Holdings Ltd. could not be treated as profits of the Associated Rubber Industry Ltd. for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioners had found as a fact that all the property of the New York company, except its land, had been transferred to an English company, and that the New York company had only been kept in being to hold the land, since aliens were not allowed to do so under New York law. All but three of the New York company's shares were held by the English company, and as the Commissioners also found, if the business was technically that of the New York company, the latter was merely the agent of the English company. In the light of these findings, the Court of Appeal, despite the argument based on Salomon's case [1897] AC 22, held that the New York business was that of the English company which was liable for English income-tax accordingly. In anoth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se the devices for what they really are and to refuse to give judicial benediction." (p. 161) In that case, the court also had occasion to refer to the following observations of Lord Brightman in Furniss v. Dawson [1984] 1 All ER 530 ; 2 WLR 226, 239 (HL): "The fact that the court accepted that each step in a transaction was a genuine step producing its intended legal result did not confine the court to considering each step in isolation for the purpose of assessing the fiscal results." (p. 157) Avoidance of welfare legislation is as common as avoidance of taxation and the approach in considering problems arising out of such avoidance has necessarily to be the same. If we now look at the facts of the case, what do we find ? A ne ..... X X X X Extracts X X X X X X X X Extracts X X X X
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