Civil Appeal No 559 of 1960
Appeal by special leave from the judgment and order dated May 114 1957 of the Income Tax Appellate Tribunal of India Delhi Bench in ITA No 2070 of 1956 57
KN Rajagopal Sastri and D Gupta for the appellant
Radhey Lal Agarwal and PC Agarwal for the respondents
867 1962
January 29
The Judgment of the Court was delivered by HIDAYATULLAH J
This is an appeal against the order of the Income tax Appellate Tribunal Delhi Bench dated May 114 1957 by which the tribunal reversing the order of the Appellate Assistant Commissioner held that a loss arising from the sale of certain shares by the respondent Company was a capital loss
Subsequent to the order of the Tribunal impugned here the Commissioner of Income tax New Delhi who is the appellant before us had moved the Tribunal for a reference to the High Court on certain questions of law said to arise out of the order of the Appellate Tribunal
That application was found to be barred by one day and since under the law the Tribunal had no jurisdiction to extend the time the application was dismissed
Against the decision of the Tribunal an application was filed in the High Court under section 663 of the Income tax Act but the High Court dismissed the application agreeing with the Tribunal that the application to the Tribunal for a reference was barred by time
The Commissioner of Income tax then applied for special leave against the order passed by the Tribunal in the appeal before it and the present appeal with special leave has been filed
Before we examine the merits of the case we shall deal with a preliminary objection raised on behalf of the respondent that the appeal is incomepetent in view of the decision of this Court in Chandi Prasad Chokhani vs State of Bihar 1 where it was held that this Court would not entertain an appeal directly from an order of the Tribunal by passing the decision of the High Court except in very exceptional circumstances
The appellant relies upon the decision of this Court in Baldev Singh vs Commissioner of Income tax 2 and contends 868 that the exceptional circumstances existing in the latter case and adverted to in the former govern the present case
The facts relating to the filing of the application for reference together with the relevant dates are these The Tribunal s order was passed by two learned Members who signed their respective orders on different dates
The Accountant Member signed his order on May 1 1957 and the Judicial Member on May 14 1957
The notice of the order was sent to the Commissioner of Income tax New Delhi and reached his office by registered post on July 15 1957
It was received by one Motilal Pathak a clerk in the office of the Commissioner
Motilal s affidavit shows that he suddenly fell ill and had to take casual leave for the day
He returned to the office the next day and dealt with the notice received from the Tribunal
By a mischance which is easy to appreciate the date stamp of the receipt of the papers was affixed on the 16th and bore that date instead of the real date viz the 15th on which the papers had actually been received
Relying upon the date stamp everybody took it for granted that limitation would expire on the 60th day counting time from July 16 1957
The application was filed on the last day of limitation on that supposition
Actually the application was barred by a day
The Income tax Tribunal therefore dismissed the application on December 4 1957
The decision of the Tribunal was unsuccessfully challenged before the High Court
It is evident that the decision of the Tribunal was quite correct and the Tribunal had no option but to dismiss the application since the law gives no jurisdiction to the Tribunal to extend limitation as is done under section 5 of the Indian Limitation Act
This Court then granted special leave against the order of the Tribunal passed in the appeal 869 before it and the question is whether the appeal should be heard or the leave revoked in view of the decision in Chokhani s case 1
In Chokhani s case 1 the attempt was to bypass the decision of the High Court on a question referred to the High Court for decision and also another decision of the High Court that no other point of law arose from the order of the Tribunal
It was held that this Court would not allow the High Court to be by passed and that an appeal from the decision of the Tribunal in the circumstances was incompetent
A similar view was again expressed in two other cases viz Indian Aluminium Co Ltd vs Commissioner of Income tax 2 and Kanhaiyalal Lohia vs The Commissioner of Income tax 3
In all the three cases reliance was placed by the appellants therein upon the decisions of this Court in Dhakeswari Cotton Mills Ltd vs Commissioner of Income tax 4 and Baldev Singh vs Commissioner of Income tax 5 It was pointed out in the judgments of this Court that the two cases relied upon were decided on the special circumstances existing there
In the first there was a question of breach of the principles of natural justice which could not be raised otherwise than by an appeal with the special leave of this Court
In the second case it was pointed out that limitation was lost by the party through no fault of his inasmuch as a letter was unduly delayed in post
In our opinion in the present case also special circumstances which justified the grant of special leave in Baldev Singh s case 5 exist
There was a combination of circumstances which led to the filing of the application a day late but in circumstances showing that the default was not due to any negligence on the part of the Commissioner of Income tax
The receipt of the notice on July 15 is admitted but the affixing of the date stamp on the 16th was due to the failure of the 870 clerk to deal with the notice on the 15th because he fell ill and had to leave the office
It is common knowledge that date stamps are altered every day in the office and this is done mostly by a very junior employee
The affixing of the date stamp on the 16th and the notice consequently bearing that date went unnoticed and relying upon the date stamp the appeal was filed though on the last day of limitation but within time
In these circumstances it is difficult to say that the Commissioner of Income tax was negligent and the negligence if any on the part of the clerk in affixing a wrong date stamp is excusable if one considers his illness and his absence from the office on the 15th
In our opinion this case comes within the rule of Baldev Singh s case 1 and an appeal direct to this Court from the Tribunal s order is justified by the special circumstances
By this appeal no decision of the High Court can be said to be bypassed because the decision of the High Court related to the correctness of the decision of the Tribunal on the question of limitation which is not a question which is sought to be raised in an indirect way by the present appeal
We therefore overrule the preliminary objection
The assessee Company is the National Finance Ltd New Delhi
It is a public limited Company which was incorporated in 1943
It deals in shares and securities and also as financiers
The present case arises from a deal in 3000 shares of the Madhusudan Mills Ltd Bombay by the assessee Company
In the year of account May 1 1949 to April 30 1950 corresponding to the assessment year 1951 52 the assessee Company sold these shares suffering a loss of Rs 548712 8 0 which it claimed as one on the sale of its stock in trade
The Income tax Officer and the Appellate Assistant Commissioner held it to be a capital loss
The 871 Appellate Tribunal Delhi Bench reversed the decision and held in favour of the assessee Company
The only question in this appeal is whether the decision of the Tribunal is right
The assessee Company belongs to a group of Companies controlled by one Lala Yodh Raj Bhalla and certain persons associated with him
It is convenient to describe these persons as the Yodh Raj Bhalla group 
These Companies are 1 Jaswant Sugar Mills Ltd 2 Jaswant Straw Boards Ltd 3 National Finance Ltd 4 National Construction and Development Corporation Ltd 5 Ganesh Finance Corporation Ltd and 6 Raghunath Investment Trust Ltd The interrelation of these
Companies is very intimate and they are practically owned by the Yodh Raj Bhalla group 
To understand this the following analysis of the shareholdings of these Companies must be sufficient 1 Jaswant Sugar Mills Ltd 200000 shares i Jaswant Straw Board Ltd 44845 ii National Finance Ltd 67390 iiiNational Construction and Development Corporation Ltd 47800 _______ 160 035 ie over 80 per cent 2 Jaswant Straw Board Ltd 6176 shares
i National Finance Ltd 4783 ii National Construction and Development Corporation Ltd 500 _____ __ 5200 odd or nearly 84 per cent 872 3 National Finance Ltd assessee Company 50000 shares
Ganesh Finance Corporation Ltd 48000 or over 96 per cent 4 National Construction and Develop ment Corporation Ltd 130504 shares
Ganesh Finance Corporation Ltd 130500 almost all 5 Ganesh Finance Corporation Ltd 50000 shares
Raghunath Investment Trust Ltd 49795 996 per cent of the capital 6 Raghunath Investment Trust Ltd 10000 shares
i Mr Yodh Raj Bhalla 1500 ii Mrs Bhalla 1000 iii Mr N C Malhotra brother in law 1000 iv Mr Ram Prasad father in law 1000 v Mr Dina Nath Secretary 1000 vi National Finance Ltd 3499 vii Mr Piyare Lal Saha 1 9000 90 per cent
The resulting position may be stated thus Ganesh Fiance Corporation Ltd practically owns the assessee Company and National Construction and Development Corporation Ltd Raghunath Investment Trust Ltd practically owns the Ganesh Finance Corporation Ltd and Yodh Raj Bhalla group  practically owns Raghunath Investment Trust Ltd 873 Jaswant Sugar Mills Ltd is practically owned by Jaswant Straw Board Ltd National Finance Ltd and National Construction and Development Corporation Ltd and Jaswant Straw Board Ltd is practically owned by National Finance Ltd and National Construction and Development Corporation Ltd Thus the entire group is owned by a consortium and there is no doubt about it
The shares of Madhusudan Mills Ltd were acquired in the following circumstances In July 1948 Mr Yodh Raj Bhalla who was in a position by reason of his holdings in these six Companies to influence decisions of the Board of Directors arranged to purchase 26547 shares of the Mills from Messrs Bhadani Brothers Ltd who were the managing agents of the Mills
This block of shares represented about 80 per cent of the total issued capital of the Mills The purchase was made at Rs 400 per share when the price in the market was about Rs 250 per share
Out of the remaining shares which were on the market 200 shares were purchased at Rs 252 8 0 per share which was then the quoted price
Now these shares were purchased by Jaswant Sugar Mills Ltd but the money for the purchase of the shares was obtained by borrowing it from some of the other concerns
These Companies as has been shown above were completely under the control of Yodh Raj Bhalla group 
The arrangement for the money was as follows Rs 1475000 borrowed from the assesee Company
Rs 500000 from National Construction and Development Corporation Ltd Rs 5500000 from the assessee Company but advanced by Ganesh Finance Corporation Ltd 874 The shares were registered as follows 10500 shares registered in the name of the assessee Company
5400 shares in the name of the National Construction and Development Corporation Ltd and the balance in the names of the nominees of Jaswant Sugar Mills Ltd which meant largely persons belonging to the Yodh Raj Bhalla group 
On October 9 1949 the assessee Company purchased 15547 shares at Rs 400 per share from Jaswant Sugar Mills Ltd and the amount paid by the assessee Company was adjusted towards the purchase price and the balance was paid
On the same day the remaining 11000 shares were sold by Jaswant Sugar Mills Ltd to National Construction and Development Corporation Ltd at Rs 400 per share
Thus on that date Jaswant Sugar Mills Ltd ceased to have any connection with the present matter
It may be pointed out that on the date on which the two transactions took place the priceruling in the market was about Rs 217 8 0
Before Jaswant Sugar Mills Ltd parted with the shares they
had appointed a new Board of Directors of the Madhusudan Mills Ltd and these new Directors also belonged to the same group
The managing agency of Messrs Bhadani Brothers Ltd was terminated and on the same day on which the shares were purchased from these managing agents the assessee Company was appointed as the purchasing and selling agent of the Mills
The assessee Company made enormous profit from the acquisition of these shares by way of dividend and commission as the purchasing and selling agent
In October and November 1948 they however sold 6525 shares to Dalmia Cement and Marketing Company Ltd at Rs 400 per share
These shares subsequently came back to the same group but 875 that is not a matter with which we are immediately concerned
On April 7 1949 4500 shares were sold by the assessee Company to the National Investment Trust Ltd at Rs 181 per share resulting in a loss of Rs 880000 and on June 1 1949 another block of 3000 shares was sold to the National Investment Trust Ltd at Rs 180 per share resulting in a loss of Rs 586312
We are not concerned with the loss arising from the first sale which was considered in the assessment year 1950 51 and in respect of which a reference is pending in the High Court of Punjab
We are concerned with the loss in the second year relating to the assessment year 1951 52
In that year the loss on the sale of the shares was sought to be set off against the profits made and the loss practically cancelled the profits
The shares which were sold by the assessee Company on the two occasioning were sold to one Amrit Bhushan a relative of Mr Yodh Raj Bhalla who sold then the same day to Messrs National Investment Trust Ltd at the slender profits of 8 annas per share which was brokerage
Thus at the beginning and at the end though numerous transactions had taken place the shares continued to be the property of the Yodh Raj Bhalla group 
The question is whether the loss on the sale of the shares be set off against the profits in the year in which the sales and profits were respectively made
The assessee Company was assessed for the assessment year 1950 51 by the Income tax Officer Meerut
In that year the loss of Rs 878062 8 0 arising from the sale of Rs 4520 shares of Madhusudan Mills Ltd was set off against the profits of the assessee Company
The case of the assessee Company for the assessment year 1951 52 was considered by the Income tax Officer Central Circle V New Delhi to whom the cases of the other Companies above named were also transferred
By looking into the 876 affairs of these Companies he came to learn that the shares of the Madhusudan Mills Ltd were purchased at a price which was almost double the current market price by the Yodh Raj Bhalla group and were transferred at the same price to the assessee Company
He found that this was done with a view to removing Messrs Bhadani Brothers Ltd from their managing agency and to securing for the assessee Company the purchasing and selling agency of the Mills
On the date of the purchase from Messrs Bhadani Brothers Ltd Jaswant Sugar Mills Ltd achieved this purpose in view of their controlling interest
Bhadani Brothers Ltd ceased to be the managing agents from that date and the purchasing and selling agency of the Madhusudan Mills Ltd was given to the assessee Company though it had on that day done no more than give a loan to Jaswant Sugar Mills Ltd In the assessment year 1951 52 the loss of Rs 586312 8 0 on the sale of 3000 shares was therefore disallowed holding it to be a capital loss
The order of the Income tax Officer Central Circle V New Delhi was confirmed on appeal by the Appellate Assistant Commissioner
On further appeal by the assessee Company the Income tax Appellate Tribunal Delhi reversed the order of the Appellate Assistant Commissioner and held that the loss was a trading loss
Whether a particular loss is a trading loss or a loss on the capital side undoubtedly depends upon the facts of each case
But it has been held over and over again that the question is not one of pure fact and that a mixed question of fact and law is always involved
The cases to which we shall make a reference presently have laid down this proposition and those cases have also indicated how the matter is to be viewed in the context of facts
In Commissioner of Income tax vs Ramnarain Sons Ltd 1 the Company was a dealer in shares 877 and also carried on the business of acquiring managing agencies of other Companies
The Company the acquired the managing agency of a Textile Mill from Messrs Sassoon J David and Co Ltd and also agreed as part of the same transaction to buy 2507 shares of the Mills
1507 shares were purchased at Rs 2321 8 0 per share and the remaining 4000 shares were purchased at Rs 1500 per share
These shares were quoted on the market at Rs 1610
Later4000 shares were sold at a loss of Rs 178000 This was shown in the books of the Company as a busines loss but was disallowed as the shares were not held to be the stock in trade of the business of the Company as share dealers
On a reference to the High Court of Bombay a Divisional Bench upheld the view of the Tribunal
ChaglaC J in delivering the judgment of the Court observed that a managing agency being an asset of an enduring nature the way to look at the matter was to enquire what was the primary intention in acquiring the shares
The learned Chief Justice then referred to a judgment of this Court reported in Kishan Prasad  Co Ltd vs Commissioner of Income tax 1 where it was observed It seems that the object of the assessee Company in buying shares was purely to obtain the managing agency of the third mill which no doubt would have been an asset of an enduring nature and would have brought them profits but there was from the inception no intention whatever on the part of the assessee Company to re sell the shares either at a profit or otherwise deal in them The learned Chief Justice then considered the argument that a block of shares might have to be bought if at all at a higher price and observed as follows A dealer in shares may succeed in getting a large number of shares at a price less than 878 the market price if the seller is in difficulties and wants to get rid of his shares and to get liquid assets
But we have not heard of a dealer in shares purchasing a large number of shares at a higher value than the market value
The other circumstance which is equally strong in this case is that the shares were purchased for the acquisition of the managing agency
Therefore the real object of the assessee company was not to do business in these shares not to make profit out of these shares but to acquire a capital asset out of which it would earn managing agency commission and make profit Messrs Ramnarain and Sons
Ltd then appealed to this Court and the decision of the Bombay High Court was upheld
The Judgment of this Court is reported in Ramnarain Sons Pr Ltd vs Commissioner of Income tax 1
It was laid down by this Court that in considering whether a transaction was or was not an adventure in the nature of trade the problem must be approached in the light of the intention of the assessee having regard to the legal requirements which are associated with the concept of trade or business
Dealing with the price above the market price which was paid in that case it was observed Even assuming that the appellants acquired the entire block of 2507 shares from Ms Sassoon J David  Co Ltd the shares transferred to the names of the directors being held by them merely as nominees of the appellants the price per share was considerably in excess of the prevailing market rate
The only reason for entering into the transaction which could not otherwise be regarded as a prudent business transaction was the acquisition of the 879 managing agency
If the purpose of the acquisition of a large block of shares at a price which exceeded the current market price by a million rupees was the acquisition of the managing agency the inference is inevitable that the intention in purchasing the shares was not to acquire them as part of the trade of the appellants in shares
 The above two decisions are merely the application of a principle of long standing which has been stated over and over again in the past
In Oriental Investment Co Ltd vs Commissioner of Income tax 1 that principle was reiterated and it was that the object for which a company was formed did not invest the deal with the characteristics of a trade in shares but that other circumstances along with that fact must be considered to find out the real object of a particular venture
Before we deal with the present case one other case of this Court may be noticed
In Rajputana Textiles vs Commissioner of Income tax 2 the converse conclusion was reached
There on the facts and circumstances of the case it was held that a particular deal in shares was a commercial venture and had all the attributes of an adventure in the nature of trade
In that case the transaction was not a single or an undivided one with a slump payment because for the managing agency Rs 1250000 were paid separately and for the shares a sum of Rs 8398000 was paid
The two acquisitions being different the profit on the sale of some of the shares was considered to be a gain on the revenue side
There is no doubt whatever that the shares of the Madhusudan Mills Ltd were acquired at a price considerably higher than the market price
In fact that the price paid was almost double
Such a deal from the business point of view was not prudent unless the purchaser stood to gain in some 880 other way
It was contended before us that this was a speculative deal in the hope that the price of the shares would firm up when the textile industries would revive
If this was the intention then it might possibly be argued that the purchasers miscarried in their calculations and suffered a loss in a business transaction
But was this the intention of the Directors of Jaswant Sugar Mills Ltd  Those who sold the shares were not only in possession of the shares but also of the managing agency of the Madhusudan Mills Ltd and the intention of the Directors of Jaswant Sugar Mills Ltd was to remove the sellers from their position as managing agents and to get the entire benefit of such or other agencies for themselves
The assessee Company has urged that might have been the intention of they Jaswant Sugar Mills Ltd but not of the assessee Company which had on that day merely given a loan to Jaswant Sugar Mills Ltd Curiously enough however the immediate benefit of the deal was the acquisition of the selling and purchasing agency of the Mills and that was obtained not in favour of Jaswant Sugar Mills Ltd but of the assessee Company even though on July 15 1948 the date of purchase the assessee Company had obtained registration of 105000 shares by way of security in its own name
Why the assessee Company was favoured in this way is not far to seek
It mattered not whether Jaswant Sugar Mills Ltd acquired that agency or the assessee Company the benefit thereof went to the same group of persons
The transaction of sale of the shares was also made within three months of their purchase and the assessee Company not only bought the 10500 shares which stood in its name but 15547 shares which gave the assessee Company a controlling voice in the affairs of the Mills
The assessee Company continued to retain the selling and purchasing agency which was very profitable
Indeed on its investment in the first year of Rs 14 lakhs odd it 881 made a profit of about Rs 7 lakhs
The question therefore would be whether the assessee company in purchasing the shares merely wished to deal in shares as stock in trade or was acquiring a capital asset of an enduring nature
This question is not one of fact pure and simple hut one of an inference in law from the proved circumstances of the case
The Income tax Officer in deciding this question against the assessee Company pointed out numerous circumstances which showed clearly that this was not a mere purchase of shares as shares by a speculator who buying a big block sometimes pays slightly more than the market rate
Bhadani Brothers Ltd owned not only the shares but also the managing agency and it is obvious that they would not part with the shares without charging for the managing agency
The price of Rs 400 per share was so out of proportion to the market price that it indicated by itself the acquisition of something more than the mere shares
According to the Income tax officer the real intention was to acquire lucrative agencies of the Mills and this intention whether it was held by Jaswant Sugar Mills Ltd Or the assessed Company or both was of the same body of persons
The Appellate Assistant Commissioner endorsed the view of the Income tax officer but the Tribunal made a distinction between one Company and another and that distinction has been pressed upon us by the assessee Company
Relying upon the well known case of Salomon vs Salomon  Co Ltd1 it was argued before us that each company must be viewed as a separate entity and that the intention of one company could not be attributed to another company even though the proprietorship of the companies might be same
As a proposition affecting companies it cannot be gainsaid but we are not concerned with a theoretical question as to the assesee Company being a separate legal entity but with the 882 question whether a particular loss made by the assessee Company is a capital or a revenue loss
The two Companies i e jaswant Sugar Mills Ltd and the assessee Company were directed by the same set of persons and the facts show that even though Jaswant Sugar Mills Ltd temporarily acquire the shares they conferred all the benefits of the acquisition upon the assessee Company from the very first day
The assessee Company also ultimately came into possession of all the shares along with another Company which was also directed by the same persons and Jaswant Sugar Mills Ltd went out of the picture within three months
In these circumstances it is easy to see that the interposition of Jaswant Sugar Mills Ltd was merely a device to secure the benefit of the English case to which we have referred
It was never intended that Jaswant Sugar Mills Ltd would hold the shares or the benefits arising from the acquisition of a block of shares giving to the holder a decisive voice in the affairs of Madhusudan Mills Ltd That controlling interest was acquired by the Yodh Raj Bhalla group  for the benefit of the assessee Company and it was an acquisition of an interest of an enduring nature
Reference was made in this connection to the transactions with the Dalmia Cement and Marketing Co Ltd in which the latter paid the same price namely Rs 400 per share
Perhaps the Dalmia Company was after the controlling interest in its own way and it is significant to note that within a short time those shares again found their way in the hands of the same group
Similarly the shares changed hands even within this group through the agency of Amrit Bhushan no doubt a broker but also a relative of Mr Yodh Raj Bhalla who profited only to the extent of 8 annas per share and bought and sold the shares from one Company to mother on the same day
All this show that the affairs of there Companies were centrally arranged and the 883 intention was to benefit the assessee Company by the acquisition of a large block of shares at a very much later prices than obtaining in the market to acquire certain agencies of a profitable character
In our opinion this transaction must be regarded as one on the capital side
Shares were never treated as part of the stock in trade
They were not sold in the market but were sold at a loss to another Company belonging to the same group with the obvious intention of setting off the losses against the profits thus cancelling the profits and saving them from taxation
In the result the appeal is allowed with costs on the respondent
Appeal allowed


Summary:
The respondent was a company dealing in shares and securities and belonged to a group of companies all controlled by the same persons
In the year of account corresponding to the assessment year 1951 52 the respondent sold the shares relating to Madhusudan Mills Ltd which it had acquired sometime earlier suffering a loss for which it claimed a set off against the profits in that year
The Income tax Officer found that the shares in question had been purchased by J a company belonging to the group at a price which was almost double the current market price that it was so done with a view to removing the sellers from their managing agency and to securing for the respondent the purchasing and selling agency of the Mills and that after the purchase J achieved the purpose in view of its controlling interest and the purchasing and selling agency of the Mills was given to the respondent though the latter had done no more than give a loan to J
It was also found that soon after the purchase the shares in question came into the possession of the respondent and that when the shares were sold it was not in the market but at a loss to another company belonging to the same group
The Income tax Officer came to the conclusion that in getting the shares the respondent did not deal with them as stock in trade but was acquiring a capital asset of an enduring nature
Accordingly he disallowed the claim holding the loss to be a a capital loss
The Appellate Tribunal however held in favour of the respondent on the view that a distinction must be made between the respondent company and J The Commissioner of Income tax moved the Tribunal for a reference to the High Court but it was dismissed on the ground that though it was barred only by one day and there was no negligence on the part of the Commissioner the Tribunal had no power to extend time
An application to the High Court was also dismissed
The Commissioner of Income tax then applied for and got special leave to appeal against 866 the order passed by the Tribunal
When the appeal came on for hearing in due course the respondent raised an objection that the appeal was not maintainable because no appeal was filed against the order of the High Court and relied on the decision in Chandi Prasad Chokani vs State of Bihar   Held that the appeal was maintainable because there was no question of by passing the order of the High Court which only related to the correctness of the decision of the Tribunal on the question of limitation which was not the subject of the present appeal
Held further that there were special circumstances which justified the grant of special leave
Baldev Singh vs Commissioner of Income tax  applied
Chandi Prasad Chokhani vs State of Bihar   distinghuished
Held also that on the facts the object was to purchase a large block of shares at a much larger price than the market value to acquire certain agencies of a profitable character that the purchase of the shares by J was merely a device but the controlling interest was acquired by the respondent and that the transaction must be regarded as one on the capital side
Ramanarain Sons P Ltd vs Commissioner of Income tax  and Oriental Investment Co Ltd vs Commissioner of Income tax   applied
Salomon vs Salomon  Co Ltd   distinguished