HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Commissioner of Income-tax, Bombay v. Jubilee Mills Ltd., Bombay
Civil Appeal No. 599 of 1961
[1963] Supp 1 SCR 83 ·
Indian Income-tax Act, 1922: section 23A and Explanation
Holding and result. The managing-agency partners and shares controlled through guardianship formed a cohesive group controlling more than 75 percent of voting power; they could not be counted as the public. The company therefore was not one in which the public were substantially interested for section 23A.
Sources & disclosures includedDownload original judgment / order
Three-judge bench; unanimous judgment delivered by M. Hidayatullah, J. · J. L. Kapur, J. · A. K. Sarkar, J. · M. Hidayatullah, J.
Assessment years: 1948-49
01 · Facts of the case
Jubilee Mills had 1,05,000 voting shares and declared only Rs.24,750 dividend despite distributable income computed at Rs.4,20,548. The officer invoked section 23A. Fourteen partners of the managing agency, some also directors, held large blocks, and additional shares were held by partners as guardians or for joint-family interests.
02 · Discussion by the Hon’ble Court
Directors are not excluded from “the public” merely by office. The inquiry is whether an individual or concerted group controls company affairs through voting power. The managing-agency partnership supplied cohesion; its partners and controlled holdings exceeded the 75 percent threshold once guardian-held minor shares were included.
03 · Judicial decision
The Court held that actual instances of concerted voting need not be proved where the circumstances and common managing-agency interest safely demonstrated concerted control. The High Court’s affirmative answer on substantial public interest was wrong and was replaced with a negative answer.
Source: Primary judgment: holding
04 · Outcome / in whose favour
Revenue’s appeal was allowed with costs in the Supreme Court and High Court. The separate earlier-loss question was not answered in this appeal and later returned in a distinct 1967 judgment.
05 · AKHB REVIEW POINT
AKHB analysis: under the historical control test, nominal share registration or directorship labels were secondary to beneficial voting power and evidence of a cohesive controlling group. Keep this 1962 control ruling separate from the later same-party decision on prior losses.
Source & verification
Download original judgment / order · Open cited source rendition
Complete 16-page SCR asset read in page-preserving text and every page image inspected; the opening page finishes the preceding report before the distinct 1962 Jubilee Mills judgment begins.
- Exact catalogue SHA-256 and 16-page count verified; the complete report was read and every source page image inspected.
Statutory scope
Section 23A and its public-substantial-interest test under the Indian Income-tax Act, 1922 are historical.
Later treatment
Source checked 2026-10-12. No comprehensive later-treatment or present-law clearance is represented. This note reports the earlier Jubilee Mills section 23A decision and is distinct from the later 1967 ruling involving prior reconstruction losses.
Page references identify the supplied PDF; paragraph references identify the judgment unless stated otherwise.
Related reviewed notes
AI disclosure & professional disclaimer
This AKHB research note was prepared with AI assistance from the identified primary report and has not been represented as independently human-reviewed.
General legal and tax research only; not legal or tax advice. Verify the complete judgment, governing statutory version and subsequent judicial treatment before reliance. The AKHB REVIEW POINT is editorial analysis, not the Court's holding, and no current-law clearance is claimed.