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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 ..... ally interested, no any justifiable ground to take a view differently as that of what had been taken by the Income Tax Appellate Tribunal - 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 – Decided against the Revenue. - Tax Case (Appeal) Nos.503, 504, 505 and 507/2004, 1014 and 1015/2005, 620/2004, 546 and 547/2004, 788 and 789/2004 and 842/2004. - - - Dated:- 25-9-2013 - Chitra Venkataraman And T. S. Sivagnanam,JJ. For the Appellant : Mr. T. R. Senthil Kumar Standing Counsel for IT Department. For the Respondent : Mr. M. P. Senthil Kumar in all TC(Appeals) for M/s. Philip George JUDGMENT (The Judgment of the Court was made by Chitra Venkataraman, J.) Since the assessee, who filed the Tax Case (Appeals) under the Income Tax Act, 1961 and the Wealth Tax Act is one and the same and the question of law raised is also common, we pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the shares in Ace Investments were transferred to the Bhagwan Das Goenka Educational Institution by way of gift only on 19.03.1984. Thus, from 01.05.1982 to 31.03.1984, during 23 months, only for the last 12 days, the Bhagwan Das Goenka Educational Institution held 49% in Ace Investments, consequently, in the assessment made on Ace Investments for 1984-85, the status as a company, in which public are substantially interested was not given. 6. It is seen from the facts admitted by both sides that in respect of assessment year 1984-85 under the Wealth Tax Proceedings, the assessee herein had gone for Samadhan, hence, we are not concerned about the status of the assessee before us. 7. It is seen from the orders passed by the Deputy Commissioner of Income Tax, Special Range IX, Madras-34, for the assessment year 1985-86 in the case of Ace Investments, that the Income Tax Department accepted the status of Bhagwan Das Goenka Educational Institution as a company for the assessment years 1984-85 and 1985-86. 8. It is further seen from the narration in the papers made available before this Court that the Company Law Board started proceedings against the Bhagwan Das Goenka Education ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Goenka Educational Institution angle. The status of the assessee has to be seen vis-a-vis the status of Ace Investments, it being the holding company for the assessee. Thus, by referring to Section 2(18)(b)(B) of the Income Tax Act, 1961, the Commissioner of Income Tax (Appeals) held that when the shares of M/s.Ace Investments were not held by the Bhagwan Das Goenka Educational Institution throughout the Ace Investments Limited s previous year in respect of assessment year 1984-85 and thus, the requirement having not fully satisfied, it could not be said to be a company, in which public are substantially interested and the assessee could not be given the same status. It further pointed out that the assessee ought to have proved that the shares of the Ace Investments had indeed been unconditionally allotted to or acquired by the Bhagwan Das Goenka Educational Institution and also that the transferred shares carried not less than 50% of the voting power. The burden of proof having not been discharged by the assessee, the status as a company, in which public are substantially interested should not be granted. Thus, differing from earlier views in the case of Ace Investments, the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal in the case of Ace Investments having attained finality, it is not open to the Revenue to reopen the issue to declare the status of the assessee as a company, in which public are not substantially interested. 16. We agree with the contentions made by learned counsel for the assessee. Section 2(18) of the Income Tax Act, 1961 defines when a company is one, in which public are substantially interested. The said provision which are relevant to the case are as under:- 2. Definitions:- (18) "company in which the public are substantially interested" a company is said to be a company in which the public are substantially interested- [(a) (a) to (a)(c) ......................................... [(ad) if it is a company, wherein shares (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, one or more co-operative societies ;] [(b) if it is a company which is not a private company as defined in the Companies Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find the question as to whether there has been a transfer at all of the shares of the Ace Investments surviving today for the Department to raise a dispute. 18. Secondly, when the order of the Income Tax Appellate Tribunal on Ace Investments dated 07.02.2002, has attained finality, which question has relevance for the purpose of deciding this case before us, it is no longer open to the Revenue to question the order or argue against the order of the Income Tax Appellate Tribunal. We do admit that there are materials before us, which were not placed before the Income Tax Appellate Tribunal. However, admittedly, when the Revenue has not furnished materials to discredit this and the findings recorded before the Income Tax Appellate Tribunal regarding the Ace Investments in the appeal filed by the Revenue, thus, having attained finality, in the background of this fact situation with 100% of the shares of the assessee company held by Ace Investments, which is recognised as a company in which public are substantially interested, we do not find any justifiable ground to take a view differently as that of what had been taken by the Income Tax Appellate Tribunal. 19. Going by Section 2( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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