LexCOMMISSIONER OF INCOME-TAX, MADRAS versus THE AMRUTANJAN LTD., MADRAS
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- 8 S.<.;.R. SUPREME COURT REPORTS 9 lord must possess in order to enable him to 1961 demolish and erect a new building." Rmltnikal PIW Demolition of the existing building and subsequent erec- ~ lion of a new building are only intermediate steps in order lndr~ Amratlal to make Jhe building fit for occupation by the landlord; In Krishan/al I swarlal Desai' s case ( 1) this Court said in R.aghubar Dayal oonnection with the provisions of s. 17 ( 1) of the Act: "What is, hoyiever, clear beyond any doubt is that when the possession is obtained in execution it must be followed by an act of occupation which must inevitably consist of some overt act in that behalf .•••.• ,, 'Occupation' of the premises in cl. ( g) does not necessarily refer to occupation as residence. The owner can occupy a place by making use of it in any manner. In a case like the present, if the plaintiffs on getting possession start their work of demolition within the prescribed period, they would have occupied the premises in order to erect a building fit for their . occupation. We therefore hold that the respondent's case came within cl. (g) of sub-s. (1) of s. 13 of the Act and therefore dismiss the appeal with costs. Three months allowed for vac.atmg · the premises on the defendant tenant undertaking to vacate the premises himself during this period. Appeal dismissed. COMMISSIONER OF INCOME-TAX, MADRAS v. THE AMRUTANJAN LTD., MADRAS , (K. SUBBA RAO, J.C. SHAH ANDS. M. SU;RI, JJ.) Income Tax-Object and scope of s. 23-A-"Company in which tht! pu1,lic are substantially interested''-Mt:aning of-Indian Income T~ Ac1, 1922 (11 of 1922), 1. 23-A. The Income-tax Officer found that the respondent company had declare.I during the three years ending March 31, 1947, March 31, 1948· (I) (1964] r S.C.R. 553. 1961 April, 2/t.. IO SUPREME COURT REPORTS 1964 .I.T., Madra1 v. orulanjan Ud. and March 31, 1949, dividends which were considerably less than 60~ of the amount available for distribution as computed under s. 23-A of the Income-tax Act, 1922. He served a notice on respondent company to show cause why an order under a. 23-A be not passed against it. After hearing the respondent the Income-tax Officer passed an order that tho undistributed portion of the assessable income of the respondent as com- puted for income-tax purposes and reduced by the amount of income-tax and super-tax payable by the company in respect thereof, shall bo tleemed to have been distributed as dividend among the share-holders. The order of the Income-tax Officer was upheld by the Appellate AU· tant Commissioner and the Income-tax Appellate Tribunal. A reference was made to High Court and the relevant question referred was whether the provisions of s. 23-A were correctly applied for the three relevant years. The High Court held that respondent company was one in which the public were substantially ·interested and, therefore, the Income-tax Officer bad no jurisdiction to pass the order under s. 23-A for any of the three years. ·The appellant came to this Court with certificate of fitness from tl\e High Court. Dismissing the appeal. HBLD:-The respondent company was one in which the public wero substantially interested and therefore, the Income-tax Officer ha.Cl no jurisdiction to pass an order under s. 23-A. The Indian Income-tax Act, 1922 does not define the cxpres!ion "com- pany in which the public are substantially interested". Normally, a com- pany would be deemed to be one in which the public are substantially interested where more than half the voting power is vested in the public. Where the controlling interest i.e. a minimum of 51 % of the voting right is held by a single individual or a group of intlividuals acting in concert, the company would be regarded as one in which the public arc not substantially interested. The distinction between the controlling group and public is not alon1 the line which distinguishes directors from the remaining members of the company. If a director does not belong to a controlling group, he will be reg11rded as a member of the public for purposes of the third proviso and explanation to s. 23-A. even though such tlirector was directly cntru.sted with the management of the affairs of· the company. Section 23-A was enacted with the object of preventing avoidance of super-tax by share-holders controlling the affairs of a company in which the public are not s
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