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TMI Blog2013 (11) TMI 656X X X X Extracts X X X X X X X X Extracts X X X X ..... alth Tax ? 3. The Tax Case (Appeals) and the assessment years under consideration in respect of the Income Tax Act, 1961 are as under:- Tax Case (Appeal).No.1014/2005 relating to the assessment year 1991-92, T.C.(A).No.1015/2005 relating to 1992-93, T.C.(A).No.842/2004 relating to 1993-94, T.C.(A).No.620/2004 relating to 1988-89. The Tax Case (Appeals) and the assessment years under consideration in respect of Wealth Tax Act are as under:- T.C.(A).No.546/2004 relating to 1991-92, T.C.(A).No.547/2004 relating to 1992-93; T.C.(A).No.503/2004 relating to 1984-85, T.C.(A).No.504/2004 relating to 1985-86, T.C.(A).No.505/2004 relating to 1986-87, T.C.(A).No.506/2004 relating to 1987-88; T.C.(A).No.507/2004 relating to 1988-89; T.C.(A).No.788/2004 relating to 1989-90; T.C.(A).No.789/2004 relating to 1990-91. 4. In the assessment under Income Tax Act,1961 as well as under the Wealth Tax Act, the assessee claimed its status as a company, in which public are substantially interested. It is seen from the facts narrated that the assessee is a subsidiary of M/s.Ace Investments Private Limited, which held 100% shares in the assessee company. The shareholders of the company were m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we have to treat the Bhagwan Das Goenka Educational Institution as Section 25 Company only till such time the proceedings before the Calcutta High Court comes to a finality on this issue. 9. It is seen from the order of the Commissioner of Income Tax (Appeals) that for the assessment year 1985-86 dated 19.06.1990, the assessee's claim that it should be taken as a company, in which public are substantially interested was accepted by the Commissioner of Income Tax (Appeals). Aggrieved by this, the Revenue went on appeal before the Income Tax Appellate Tribunal, which dismissed the Revenue's appeal. As against the order of the Income Tax Appellate Tribunal dated 07.02.2002, admittedly, the Revenue has not come on appeal before this Court. 10. As far as the case of the assessee as well as the assessments relating to the assessee herein viz., M/s.Express Newspapers Limited, for the year under consideration 1984-85 is concerned, as already seen, there is no question now surviving for decision. However, for the assessment years relating to 1985-86, 1986-87, 1987-88 and 1988-89 are concerned, a reading of the order of Commissioner of Income Tax (Appeals) shows that he took a different vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bstantially interested, the same status was extended to the assessee herein. In view of this, the assessee's case was allowed and the Revenue's case was dismissed. Aggrieved by this, the Revenue has preferred the above Tax Case (Appeals). 14. Learned Standing counsel appearing for the Revenue submitted that the mere fact that the Bhagwan Das Goenka Educational Institution is stated to have had 49% of the shares in Ace Investments, per se, would not lead to an inference that Goenka Educational Institution had 50% voting power in Ace Investments. In any event, when the status of the Bhagwan Das Goenka Educational Institution as Section 25 Company itself is under challenge, Ace Investments could not be considered as a company in which public are substantially interested; in the circumstances, the assessee's case fails. Learned Standing Counsel appearing for the Revenue submitted that there are no materials to show that all shares in Ace Investments were held by Goenka Trust Educational Institution; in the circumstances, the Income Tax Appellate Tribunal committed serious error in accepting the case of the assessee. 15. Per contra, learned counsel appearing for the assessee submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 956), and any rules made thereunder ; [(B) shares in the company (not being shares entitled to a fixed rate of dividend whether with or without a further right to participate in profits) carrying not less than fifty per cent of the voting power have been allotted unconditionally to, or acquired unconditionally by, and were throughout the relevant previous year beneficially held by- (a) the Government, or (b) a corporation established by a Central, State or Provincial Act, or (c) any company to which this clause applies or any subsidiary company of such company [ if the whole of the share capital of such subsidiary company has been held by the parent company or by its nominees throughout the previous year.] 17. It is not denied by the Revenue that as per the findings given in the assessment order under the Wealth Tax Act, in the assessee's case, for the assessment year 1984-85, there is a finding that 49% of the shares in Ace Investments were transferred to Bhagwan Das Goenka Educational Institution as early as on 19.03.1984. Considering the fact that during the year relevant to that previous accounting year, shares were held only for last 12 days, the status of the company in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... continue only so long as the status of the Bhagwan Das Goenka Educational Institution continue as a Section 25 Company under the Companies Act, 1956. However, in the event of any order passed therein in the Writ Petition filed before the Calcutta High Court, adverse to the interests of Bhagwan Das Goenka Educational Institution, it is always open to the Revenue to reopen the assessment as per Section 150 Sub Section 1 of the Income Tax Act, 1961. 21. It is a matter of relevance herein to note further that in the appeal filed for the assessment year 1989-90 by the Revenue, the Income Tax Appellate Tribunal upheld the order of the Commissioner of Income Tax holding that when the wholly owned subsidiary could be considered as a company in which public are substantially interested, the assessee-company ought to be treated as a company in which public are substantially interested. The order of the Income Tax Appellate Tribunal dated 02.04.2002 in the assessee's own case, thus having attained finality, there being no appeal filed against this order, we do not find any merit in the Revenue's contention. 22. Accordingly the Tax Case (Appeals) filed by the Revenue are dismissed. No costs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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