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TMI Blog1990 (8) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... pany which is the parent company of Johnson Johnson Limited, is registered under the laws relating to companies in the United States and its shares are quoted at New York Stock Exchange. 3. The claim of the assessee in this regard before the revenue authorities was that the assessee is a company in which public are substantially interested as its share capital was substantially held by the public. This was rejected, both the assessing officer and by the CWT(A). 4. It is contended on behalf of the assessee that section 40 of the Finance Act, 1983, which provided for levy of charge to wealth-tax of companies, takes effect from assessment year 1984-85 ; though the same is deemed to have come into force on the first day of April, 1983. This, according to the assessee, is an undisputed position and is also evident from the Circular No. 372 dated 8-12-1983. Under the Explanation to section 40(1) a company in which public are substantially interested should have the meaning assigned to it in section 2(18) of the IT Act, 1961. It is argued that since provisions of section 40 of the Finance Act, 1983, had come into force w.e.f. 1-4-1983, the amended section 2(18) which has effect from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Supreme Court in CGT v. N.S. Getti Chettiar [1971] 82 ITR 599, it is contended that an interpretation clause which extends the meaning of a word does not take away its ordinary meaning. Thus, it is claimed, a word or an expression in a statute has to be given its ordinary meaning in addition to its extended meaning which it is capable of assuming under the interpretation clause. This view, it is submitted, is supported by the Explanation to section 2(18)(b)(B). Reference to Indian company in that section whose business consists of certain specified types of activities would clearly go to indicate that companies other than Indian companies are not excluded from the definition which took effect from 2-4-1983. It is then submitted that the legislative intent was to make sec. 2(18) exhaustive. Then there was no need to make a reference to Indian companies u/s. 2(18)(b)(B). It is a broad rule of interpretation and one which is accepted by the Courts that a construction which would make the provision workable is preferable to the one which renders it meaningless and nugatory. If this test of rule of interpretation is applied, there can be no escape of conclusion that a company in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the valuation date the company was one in which the public were not substantially interested as per the new definition given to that expression, we dont's see any merit in the contention of the assessee that since this is a definition by incorporation, the subsequent amendment has to be ignored. Reliance on the decision of the Supreme Court in Mahindra Mahindra Ltd.'s case to our mind, is totally misplaced. If one goes through the decision carefully, it would be clear that this decision was rendered in an entirely different context. That was a case where the Supreme Court had discussed at length the scope and ambit of appeal under section 55 of MRTP Act. This section provides, inter alia, that any person aggrieved by an order made under section 13 may prefer an appeal to the Court on "one or more of the grounds specified in section 100 of the Code of Civil Procedure, 1908". Section 100 of CPC specified three grounds on which second appeal could be brought to the High Court and one of the grounds was that the decision appealed against was contrary to law. The Legislature intended to confer on a person under the MRTP Act a right of appeal on the same grounds as in section 100 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther elaborated these remarks by stating that if there is a mere reference to a provision of one statute in another without incorporation, then unless a different intention clearly appears the provisions of that statute would apply and the reference would be construed as a reference to the provision as may be in force from time to time in the former statute. But if the provision of one statute is incorporated in another, any subsequent amendment in the former statute ; or even if it is totally repealed, would not affect the provision as incorporated in the latter statute. In this case reference to section 2(18) of the IT Act, 1961, in section 40 of the Finance Act, 1983, can only be construed as a reference and not incorporation and this would be evident if one looks at the scheme of the IT Act, 1961 for the purpose of taxation. Companies have been categorised in a variety of ways. The categorisation was primarily with a view to determining the tax liability of these companies. Thus, a company in which public are not substantially interested was required to pay tax at a higher rate. There was a tax on companies under the Wealth-tax Act also at the inception but the same was dispen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In this appeal the learned counsel for the assessee has only sought to advance its case by relying heavily on the use of the words "Indian company" in the Explanation to section 2(18) of the IT Act. These words in the Explanation can in no way give a meaning different from the one which is given in the main section. 10. We are also not impressed by the argument of the assessee that the definition of the expression "company in which public are substantially interesed" in section 2(18) of the IT Act cannot be regarded as exhaustive because of the words "is said to be" appearing in that section. A mere reading of the section would leave nobody in doubt that section 2(18) of the IT Act, 1961 defines the expression "company in which public are substantially interested" in a comprehensive manner. There would, therefore, be no scope to read anything beyond what is contained in that section on the specious plea that an interpretation clause which extends the meaning of a word does not take away its ordinary meaning. The definition of the widely held company does not extend its meaning but seeks to restrict the same. In this view of the matter, we are inclined to reject the contention o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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