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Issues:
1. Whether the assessee is a company whose business consists wholly or mainly in holding investments. Analysis: The judgment pertains to four appeals by the assessee concerning the assessment years 1959-60 to 1962-63. The Income Tax Officer (ITO) assessed super-tax or income tax on undistributed income, considering the assessee as a company primarily engaged in holding investments. The Appellate Assistant Commissioner (AAC) and Tribunal also leaned towards this view. However, the Tribunal remanded the appeals for fresh disposal, leading to a more precise determination that the assessee's business mainly involves holding investments, prompting the appeals by the assessee. The main issue for consideration was whether the assessee's business predominantly revolves around holding investments. The Department argued that if the principal source of income is from investments, the test is satisfied. However, the Tribunal emphasized the need to analyze the facts and nature of investments to determine if the test set by the Supreme Court in CIT vs. Distributors (Baroda) P. Ltd. is met. The Departmental Representative relied on the Nawa Estates (P) Ltd. vs. CIT judgment, but the Tribunal disagreed, asserting that the Distributors (Baroda) P. Ltd. case's test remains applicable. The Tribunal highlighted that the key is to ascertain if there is an organized, systematic investment activity aimed at earning profits. Further scrutiny revealed that the assessee, a company incorporated in 1942, primarily derived income from dividends. The Tribunal examined the investments analysis provided by the AAC and found no significant organized activity in the investments. Additional data spanning 17 years also failed to demonstrate systematic investment activity. The Tribunal accepted the assessee's explanation that investments were not made for profit motives but due to various other reasons, indicating that dividends were a normal consequence rather than the primary objective. Consequently, the Tribunal concluded that the assessee's business did not predominantly involve holding investments. As a result, the Tribunal allowed all four appeals, directing a revision of the assessments for super tax or income tax on undistributed income based on the finding that the assessee was not primarily engaged in holding investments.
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