Sir Dinshaw Maneckjee Petit, Re, A.I.R. 1927 Bom. 371.
Dinshaw, an assessee, who was receiving huge dividend and interest income, transferred his investments to 4 private companies formed for the purpose of reducing his tax liability. These companies transferred the income to Dinshaw as a pretended loan.
Held, the companies were formed by Dinshaw purely and simply as a means of avoiding tax obligation and the companies were nothing more than the assessee himself. They did no business but were created simply as legal entities to ostensibly receive the dividends and interest and to hand them over to Dinshaw as pretended loans.
Dinshaw, an assessee, who was receiving huge dividend and interest income, transferred his investments to 4 private companies formed for the purpose of reducing his tax liability. These companies transferred the income to Dinshaw as a pretended loan.
Held, the companies were formed by Dinshaw purely and simply as a means of avoiding tax obligation and the companies were nothing more than the assessee himself. They did no business but were created simply as legal entities to ostensibly receive the dividends and interest and to hand them over to Dinshaw as pretended loans.
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