assessee is in appeal before us against order of learned CIT(A) dated 30-8-1991 for assessment year 1985-86. 2. First ground in appeal is against disallowance of Rs. 2,00,398 in respect of debts written off due from CBS Gramaphone & Tapes India Ltd. This ground was not pressed at time of hearing and hence, same is dismissed as such. 3. Next ground relates to disallowance of Rs. 19,53,000 being liability for expenses on behalf of Tata Mills Ltd. Similar ground had come up before Tribunal in assessee's own case for assessment year 1984-85 in ITA Nos. 3624 and 3845/M/91 dated 21-1-2000. said ground was allowed by Tribunal in afore-mentioned appellate order to which, one of us (the A.M.) is party. Hence, following earlier order of Tribunal, this ground of assessee is allowed. 4. Next ground is against not treating company as financial company s per section 40A(8) of Income-tax Act, 1961 ('the Act'). This ground was also matter of adjudication in appeals cited (supra) for assessment year 1984-85 and it was held that assessee-company is Financial Company and hence, disallowance under section 40A(8) has to be deleted. facts for present year remaining same, we follow earlier order of Tribunal and delete disallowance of Rs. 10,25,032 made under section 40A(8) of Act. 5. Ground No. 4 is against disallowance of Rs. 35,24,873 being 10 per cent of dividend income on ad hoc basis. This ground was not pressed at time of hearing and hence same is rejected as such. 6. Fifth ground in appeal is against disallowance of Rs. 99,860 as prior period expenses. This ground was also not pressed at time of hearing and hence, same is dismissed as such. 7. sixth ground is against not treating company in which publics are substantially interested as per section 2(18) of Act. In its return as well as by its letter dated 15-7-1987, assessee had claimed itself to be company in which public are substantially interested and it was also stated that company was covered under section 104(2)(iii) of Act. Assessing Officer observed that for assessment year 1984-85, CIT had passed order under section 263 of Act and had held as follows:- 'The assessee company cannot fall under section 2(18)(b)(B) - (a), (b) or (c). sub-clause (d) having been deleted with effect from assessment year 1984-85, status of assessee company for this assessment year can only be company in which public are not substantially interested.' Assessing Officer noted that facts relating to issue being same as last year, he held that company was not company in which public are n o t substantially interested as it did not fulfil conditions laid down under section 2(18) of Act. 8. CIT(A) held that construction placed on term by Assessing Officer was not only in keeping with definition as contained in section 2(18), but was in confirmatory with basic concept and essential meaning of term 'the company in which public are substantially interested'. Accordingly, he upheld action of Assessing Officer on this matter. 9. At outset, it was submitted by Mr. Dinesh Vyas, ld. counsel for assessee company, that Finance Act for relevant year prescribed three rates of taxes for corporate sector, viz., 55 per cent for widely held companies, 60 per cent for closely held companies and 65 per cent for trading companies. There is no dispute over fact that assessee is not trading company. However, if claim of company is accepted, then it would be taxed at 55 per cent and not at 60 per cent as held by department. It is also admitted and it is on record that 78.71 per cent of shares in assessee company are held by four public charitable trusts. 10. Coming to arguments proper of Mr. Vyas, firstly it was contended that natural and ordinary meaning should be given to phrase 'a company in which public are substantially interested.' claim of assessee is not based on extended meaning provided in section 2(18) of Act. In this connection, our special attention was invited to opening sentence of section 2 which mentions 'In this Act, unless context otherwise requires,....' It was submitted that in context of concessional rate of taxation, one should go by natural and ordinary meaning of term defined without being bound by artificial and extended definition of section 2(18). 11. With regard to term 'person having interest', our attention was invited to provisions of Bombay Public Trust Act, 1950. Section 2(10)(e) of said Trust Act included beneficiary of public trust as person interested in trust. Reference was also made to sections 41B and 50 of said Trust Act whereby trustees incurred liabilities for breach of trust and also entitled any beneficiary to lodge complaints before Charity Commissioner. In instant case, it was submitted, since public at large were beneficiaries of Trust, automatically, by virtue of trusts' shareholding in assessee company, it (i.e., public) became substantially interested in assessee company. In this connection, decision of Supreme Court in case of Deoki Nandan v. Murlidhar AIR 1957 SC 133 and of Lahore High Court in case of Nihal Chand v. Narain Das AIR 1934 Lahore 949 were referred to. 12. Reference was then made to decision of Madras High Court in case of Amrutanjan Ltd. v. CIT [1961] 41 ITR 21, wherein, High Court's observations while dealing with identical provisions in section 23A of 1922 Act were upheld by Calcutta High Court in N.C. Sen and B.C. Sen v. ITO [1964] 51 ITR 218. said observations were to effect that companies specified in said provision could only be addition to category of 'company in which public are substantially interested.' 13. Mr. Vyas drew our attention to Craies and Statute Law under paras entitled 'Ordinary meaning not taken away by clause extending meaning of word', 'Interpretation clauses inserted ex abundanti cautela' and 'Interpretation clause not necessarily applicable on every occasion when word interpreted is used in Act.' He also referred to commentary in Maxwell on Interpretation on Statutes. Mr. Vyas then referred to host of decision wherein term 'unless context otherwise requires...' was interpreted. Referring to several categories of companies mentioned in section 2(18), it was stated that it was only out of abundant caution that categories were specified and which, but for specific categorisation would not have been classified as widely held companies. Finally, concluding his arguments, Mr. Vyas submitted that if departmental stand is taken to its logical conclusion, then even if 100 per cent shares were held by public trusts, concessional rate of tax would never be available to such company and which could not be intention of Legislature. Thus, it was vehemently pleaded that assessee-company be treated as company in which public are substantially interested and that concessional rate of tax be applied to it. 14. Mr. H. Srinivasulu, ld. D.R. made elaborate arguments in support of orders of authorities below. Firstly, it was submitted that taxing statute has to be construed strictly. In support of this submission, reliance was placed on decision of Delhi High Court in case of Modipon Ltd. v. CIT [2001] 247 ITR 40 and of Calcutta High Court in case of ITO v. Chand Mull Bhatia [1978] 115 ITR 388. As corollary, it was submitted, definition in taxing statute also ought to be construed strictly. In this connection, it was further submitted that normally definition as given in statute prevails throughout Act unless context otherwise requires. In support of contention, commentary, by Chaturvedi & Pithisaria on page 32 (Vol. 1 - 5th edition) was referred to. Several clauses of section 2 providing for various definitions were referred to. It was pointed out that whereas certain clauses used word 'means', certain other clauses used word 'includes'. Reference was made to order of Tribunal in case of LIC [Interest Tax Appeal No. 9/(Bom. of 1996). In said decision it was observed by Tribunal that when term 'means and includes' is used, definition is meant to be exhaustive and neither extensive nor inclusive. When term 'means' is used it gives hard and fast definition. In clause (18) of section 2, it was submitted, term 'is said to be' is used which is qualified by phrase 'if it is.....' Thus, it was sought to be impressed by Mr. Srinivasulu that phraseology used in section 2(18) tantamounts to using term 'means'. 15. use of definition in section 2(18) was broadly two-fold, viz. (a) difference in tax rate and (b) for purpose of section 104. Keeping these purposes in mind, it was contended, enlarged meaning could not be given. It was contended that if enlarged meaning is given, then it may lead to abnormal situations. ld. D.R. gave illustration of companies in infrastructure-sector. situations. ld. D.R. gave illustration of companies in infrastructure-sector. These companies also could be said to be catering for public purpose and hence howsoever restricted shareholding may be, it would always be treated as public company. This, according to ld. D.R., was not intention of Legislature. Natural meaning as advocated by ld. counsel could be given only when there was inclusive definition and not exhaustive one as was case in section 2(18). 16. With regard to purport of using words 'unless context otherwise requires', it was contended that where by special provisions, enactment brings different meaning, then that special definition would prevail over general definition. In this connection, decision of Allahabad High Court in case of CIT v. J.K. Cotton Spg. & Wvg. Mills Co. Ltd. [1987] 164 ITR 18 and of Bombay High Court in case of CIT v. Indian Hotels Co. Ltd. [1983] 141 ITR 343 were relied upon. Relying on decision of Bombay High Court in case of CIT v. Indo Oceanic Shipping Co. Ltd. [2001] 247 ITR 247 it was submitted that definition given in non-fiscal statute could not be borrowed for purposes of fiscal statute. 17. Finally, summing up his arguments, Mr. Srinivasulu submitted that t h e r e cannot be any doubt about meritorious services rendered by shareholder trusts, however, it was not germane to issue on hand. definition given in section 2(18) was exhaustive definition, that concessional rate of tax cannot be said to be incentive provision, it remained charging provision and hence it has to be strictly construed, and if so construed, assessee could not be treated as widely held company. 18. In his counter-reply, Mr. Vyas specifically referred to ld. D.R.'s submission regarding meanings to be imported from other statutes. Referring to decision in Indo Oceanic Shipping Co. Ltd. (supra) relied upon by ld. D.R., it was submitted that Bombay High Court itself noted that Merchant Shipping Act was not in pari materia with Income-tax Act. Therefore, provisions thereof did not apply to Income-tax Act and more so when term 'India' was Specifically defined in section 2(25A) of Act. 19. With regard to decision in Indian Hotels Co. Ltd.'s case (supra), it was submitted that provisions interpreted therein were no longer on statute book. It was further contended that whereas Bombay High Court in that case was seized with interpretation of section 2(18), assessee case in present appeal was to remain outside said provision and that it be dictated only by natural meaning of term 'company in which public are substantially interested.' 20. On specific query from Bench as to whether aspect of control of affairs of company was of any relevance, reply of Mr. Vyas was in negative since clause (iii) of section 2(18)(b)(i) dealing with control of affairs of company had been deleted after amendment in 1983. On specific query posed to ld. D.R. as to whether he stands committed to proposition that words 'is said to be' used in section 2(18) have same connotation as term 'means', his answer was in affirmative. 21. We have duly considered rival contentions and material on record. We pick up issue from were ld. D.R. replied to our query as mentioned above. We cannot agree to his arguments that words 'is said to be' means same thing as word 'means'. There cannot be any dispute over interpretation that term 'means' gives hard and fast definition to t h e term defined. While defining term 'company in which public are substantially interested', nothing precluded Legislature to define it by using term 'means'. If that was intention of Legislature, section 2(18) could well have read as 'a company in which public are substantially interested' means following companies - However, instead using term 'means', Legislature used term 'is said to be'. This only leads us to conclude that Legislature intended to travel beyond normal meaning of public company. Our view gets corroborated by fact that most of categories mentioned in section 2(18) of Act, but for their inclusion therein, would not have been categorised as widely held companies. As illustration, we take clause (a) of section 2(18). According to said clause, company in which at least 40 per cent of shares are held by Government etc., it would be regarded as widely held company, even though it may have been registered as Private Company. Similarly, if we consider clause (aa), it includes company which is registered under section 25 of Companies Act, 1956. These companies are registered under section 25 of Companies Act, 1956. These companies are generally entities like chambers of commerce, clubs etc. which are essentially non-profit making concerns and in absence of share capital, in ordinary sense of term, it could not have been classified as widely held company. Thus, point we are trying to drive home is that by using term 'is said to be', Legislature has tried to rope in certain categories of companies which otherwise would not have been regarded as companies in which public are substantially interested. In this connection, we draw ample support from decision of Supreme Court in case of Amrutanjan Ltd. (supra). 22. This takes us to another important argument of ld. D.R. and i.e., with regard to his reliance on decision in case of Indian Hotels Co. Ltd. (supra). On careful reading of decision, we find that none of arguments which are raised here were before Bombay High Court. As rightly pointed out by Mr. Vyas, High Court in that case was concerned with statutory provision which no longer exists for assessment year with which we are concerned. In it, words 'held by' were interpreted by High Court, which in our opinion, is narrower concept, than concept 'substantially interested.' In this context, it is well established, as held by Bombay High Court in case of CIT v. Thane Electricity Supply Ltd. [1994] 206 ITR 727 that what is binding on Court in subsequent case is not conclusion arrived at in previous decision, but ratio of that decision for it is ratio which binds as precedent and not conclusion. 23. In short, we are satisfied that assessee-company before us is company in which public are substantially interested. Though our conclusion is mainly based on two specific arguments of ld. counsel namely, meaning of term 'is said to be' and decision in Indian Hotels Co. Ltd.'s case (supra), we are also convinced that context in which definition has to be read is concessional rate of tax. In other words, since context does not require us to travel beyond scope of issue before us, no other meaning can be ascribed to term 'a company in which public are substantially interested'. As observed in para 22 above, words 'held by' has narrower scope than concept 'substantially interested', definition of term 'persons having interests' as defined in Bombay Public Trust Act becomes relevant. Thus, besides two Specific arguments referred to by us in this para, purport of term 'unless context otherwise requires' and wider definition of term 'persons having interests' in Public Trust Act has also weighed with us in coming to conclusion we have come to. It may not be out of place to mention that stricter definition which existed earlier has been considerably toned down by including more and more companies coming under coverage of section 2(18) of Act. Thus, we uphold contention of ld. counsel and hold that assessee-company is company in which public are substantially interested. 24. Ground No. 7 is against not allowing deduction of Rs. 1,99,245 in respect of amounts outstanding at year-end in respect of Provident Fund and Superannuation Fund liabilities. It is submitted by ld. counsel for assessee that said deduction has been allowed to assessee in subsequent years and hence, issue does not survive in this year. Accordingly, ground is dismissed as infructuous. 25. Ground No. 8 is against treating cash compensatory support of Rs. 24,15,820 as revenue receipt and not as capital receipt as claimed by assessee. In view of retrospective amendment in Act with regard to taxability of this item, ground is not pressed by assessee and hence, same is dismissed. 26. In result, assessee's appeal is partly allowed. Per I.P. Bansal, Judicial Member. - I have carefully gone through proposed order passed by learned brother, but, unfortunately, I am unable to pursuade myself to agree with proposed view (in ground No. 6) insofar as treating assessee-company as company in which public are substantially interested is concerned. 2. facts are stated in detail in order proposed by my learned brother and therefore not repeated here. I proceed to touch upon reasons which compels me to hold that assessee is not company in which public are substantially interested. 3. It is cardinal principle in construction of enactments that, unless context otherwise requires, definition of expression contained in Act should prevail thoughout Act. Therefore, whenever different meaning is sought to be given to that expression occurring at different places in Act, it is necessary to point out why context requires different meaning to be given to same expression occurring at different places in Act. (Reference is invited to decision in case of CIT v. Dredging Corpn. of India [1988] 174 ITR 682 at page 687 (AP). 4. 'Unless context otherwise requires' means that same words should have been used elsewhere in Act in different context. If we were to interprete those words in that context, one may ignore definition given under section 2(18). However, in this case, there is no such expression elsewhere in Act so as to protect or give benefit to company such as assessee here- in. Absence of any such clause in respect of companies who should otherwise have been held as 'company in which public are substantially interested', has unnecessarily affected some companies and Legislature realised this difficulty and by Finance Act, 1971 suitably amended section 2(18) to bring within its fold companies which were registered under section 25 of Companies Act. This was also explained in explanatory notes on provisions of Finance (No. 2) Act, 1971 vide Circular No. 72 dated 6-1-1972. relevant portion of Circular would highlight issue as under: '33. company is treated, for purposes of income-tax, as 'company in which public are substantially interested', only if it satisfies various tests laid down in definition of term in section 2(18) of IT Act. Broadly speaking, aim of these tests is to decide whether there is wide public participation in ownership of shares in, and control over affairs of company. Entities like Chambers of Commerce, Clubs, etc. which are declared to be 'companies' by Board under relevant provisions of Income-tax Act, are essentially non-profit making concerns and in absence of share capital, in ordinary sense of term, it is not practicable to apply to such entities tests of 'company in which public are substantially interested'. same difficulty arises with regard to companies limited by guarantee. 34. In order to obviate difficulties pointed out above, definition of 'company in which public are substantially interested' in section 2(18) has been amended by section 3(b) of Finance Act in order to provide that company which is registered under section 25 of Companies Act (i.e., company having for its object promotion of commerce, art, science, religion, charity or any other useful object and which prohibits payments of dividends to its members) will be regarded as company in which public are substantially interested without application of various tests as to composition of ownership of shares in, and control over affairs of company. Further, in order to cover cases of entities which are not registered as companies but are declared to be companies for tax purposes and to companies limited by guarantee which are not registered under section 25, CBDT has been empowered to direct that any such entity or company shall be treated as company in which public are substantially interested. Such direction will be made by Board having regard to objects of company, nature and composition of its membership and other relevant considerations. Board is empowered to issue such direction even in respect of past year and direction will have effect for assessment year or years specified therein.' 5. In case of Chamber of Commerce, Club etc., pragmatic view would h v e been to treat them as companies in which public are substantially interested. But probably it was found difficult to raise such contention, i.e., of including such companies in definition of section 2(18), and, thus, Legislature had to intervene. case of assessee company cannot be said to be any different. following observations of Hon'ble Bombay High Court in case of CIT v. Indian Hotels Co. Ltd. [1983] 141 ITR 343, in my sincere view, leads to only interpretation that assessee-company do not fall under section 2(18) of Act: 'Now, arguments before Tribunal in instant case had proceeded on footing that 81 per cent of shares held by three public trusts must be treated as being held by public. As indicated by decision referred to above, two questions will have to be answered. Firstly, whether there is any group of shareholders who can be considered as block and whose voting power is more than 50 per cent and, secondly, are 50 per cent of shares power is more than 50 per cent and, secondly, are 50 per cent of shares acquired unconditionally and beneficially held by public. As matter of fact, any view which we may take on argument which is advanced before us at considerable length on behalf of assessee that shares held by trustees must be treated as shares held by public, would be sufficient to answer question referred to us in this reference. We have repeatedly tried to ascertain from Mr. Vyas as to whether shares held by three trusts, which between themselves hold about 81 per cent of shares and they are undoubtedly group of Tata Charities, can be said to have been beneficially held by any particular person and we have been repeatedly told that public in generally, who are beneficiaries under trusts, are beneficial holders of these shares. This runs counter to decisions of Supreme Court. As already pointed out, if person does not hold share for his own benefit, that person must fall out of category of 'public', as contemplated by definition in section 2(18) of Act. Admittedly, shares are held by trustees in their own names, but they are admittedly not beneficial holders of shares. If shares are not held by trustees for their own benefit and they are held for benefit of some body else, on law laid down by Supreme Court, they must be out of category of 'public'. total number of shares held by these three trusts comes to about 81 per cent. This by itself will rule out any possibility of prescribed 50 per cent of shares being held by public.' 6. This view was also affirmed in case of CIT v. Madhusudan Bros. Ltd. [1993] 204 ITR 74 (Bom.). It is not even disputed by learned counsel for assessee that as per plain meaning of section 2(18) of Act assessee- company cannot be treated as company in which public are substantially interested. In my considered view, benefit of treating company as company in which public are substantially interested cannot be extended to assessee-company in view of plain language of section and also in light of decisions of Hon'ble jurisdictional High Court which are directly on issue. intent of Legislature in making suitable amendment to include such companies which should have otherwise been brought within fold of section 2(18), would also cushion conclusion reached by me. 7. In result I reject contention of assessee-company with regard to treatment of assessee as company in which public are substantially interested. 8. With regard to grounds other than ground No. 6 I agree with views and findings of my learned brother. REFERENCE UNDER SECTION 255(4) OF INCOME-TAX ACT, 1961 We Members of Mumbai Bench 'C' have differed on one issue in case of Tata Sons Ltd. v. Dy. CIT, Spl. Range-1, Bombay in ITA No. 8231/Bom./91. Hence, this reference is made to Hon'ble President of Income-tax Appellate Tribunal to nominate Third Member to decide point of difference. point of difference is as follows:- 'Whether on facts and in circumstances of case and in law, assessee company is company in which public are substantially interested as per section 2(18) of Act.' Accountant Member has held that same to be company in which public are substantially interested whereas Judicial Member has held it to be company in which public are not substantially interested. THIRD MEMBER ORDER Per Shri R.P. Garg, Vice President. - On difference of opinion 'between t h e Members, following point of difference has been referred by President, ITAT under section 255(4) of Income-tax Act, 1961, for my opinion as Third Member:- 'Whether, on facts and circumstances of case and in law assessee company is company in which public are substantially interested as per section 2(18) of Act.' 2. assessee, in its return of income as well as by its letter dated 15-7- 1987, had claimed itself to be company in which public are substantially interested and it was also stated that company was covered under section 104(2)(iii) of Income-tax Act, 1961 [in short 'the Act']. 3. Assessing Officer noticing finding of CIT under section 263 for assessment year 1984-85, and stating that facts relating to issue being same as last year held that company was not company in which public are substantially interested as it did not fulfil conditions laid down under section 2(18) of Act. 4. CIT in assessment year 1984-85 passed order under section 263 of Act and held as under:- 'The assessee company cannot fall under section 2(18)(b)(B) - (a), (b) or (c). sub-clause (d) having been deleted with effect from assessment year 1984-85, status of assessee company for this assessment year can only be company in which public are not substantially interested.' 5. As to what ultimately happened in assessment year 1984-85 is not brought on record by either party. 6. CIT(A) held that construction placed on term by Assessing Officer was not only in keeping with definition as contained in section 2(18), but was in conformity with basic concept and essential meaning of term 'the company in which public are substantially interested'. Accordingly, he upheld action of Assessing Officer on this matter. 7. When matter came up before Tribunal there struck difference of opinion - Accountant Member held company to be company in which public are substantially interested and Judicial Member held it to be company in which public are not substantially interested. 8. Shri Dinesh Vyas, learned counsel for assessee, carried us through various provisions of law and decided cases to advance his case and l s o submitted written submissions. According to him natural and ordinary meaning of term 'company in which public are substantially interested' cannot be destroyed; that provisions contained in section 2(18) are inclusive one and serve purpose of only extending ordinary meaning of said term; that as far as facts are concerned, there is no dispute that public trusts are holding 78.71 per cent of shares and therefore public have interest in trusts by virtue of sections 2(10), 41B and 50 of Bombay Charity Trust Act, 1950 and consequently public are interested in assessee-company through trusts; that decision of Bombay High Court in case of CIT v. Indian Hotels Co. Ltd. [1983] 141 ITR 343 as relied upon by revenue is not authority for any of issues to be decided in this appeal and consequently, assessee-company has to be treated as 'company in which public are substantially interested'. He also referred to certain decisions wherein defined meaning has been extended keeping into consideration term 'unless context otherwise require'. 9. Shri P.K. Das, ld. D.R. made elaborate arguments in support of orders of authorities below. He submitted that taxing statute has to be construed strictly; that normally definition as given, in statute prevails throughout Act unless context, otherwise requires; that in several clauses of section 2 providing for various definitions Legislature used in certain clauses word 'means', and in other clauses used word 'includes'; that when term 'means' is used it gives hard and fast definition; that in clause (18) of section 2, term 'is said to be' is used which is qualified by phrase 'if it is...' , which phraseology used in section 2(18) tantamount to using term 'means'; that definition in section 2(18) is broadly for two-fold uses, viz. (a) difference in tax rate and (b) for purpose of section 104; that keeping these purposes in mind, enlarged meaning could not be given as otherwise it might lead to abnormal situations. He gave illustration of companies in infrastructure sector. These companies also could be said to be catering for public purpose and hence howsoever restricted shareholding may be, it would always be treated as public company. This according to ld. DR was not intention of Legislature. Natural meaning as advocated by learned counsel could be given only when there was inclusive definition and not exhaustive one as is in section 2(18) of Act. With regard to purport of using words 'unless context otherwise requires', it is contend that where by special provision, enactment brings different meaning, than that special definition would prevail over general definition. Finally, he submitted that there cannot be any doubt about meritorious services rendered by shareholder trusts, but it is not germane issue on hand; that Bombay High Court decision in case of CIT v. Indian Hotels Co. Ltd. [1983] 141 ITR 343 covers issue. It is also submitted that definition given in section 2(18) is exhaustive definition, that concessional rate of tax cannot be said to be incentive provision, it remained charging provision and hence it has to be strictly construed, and if so construed, assessee could not be treated, as widely held company. 10. Parties are heard and their rival submissions considered along with material placed on record. Section 2(18) as it stood in impugned year reads as under: '2. In this Act, unless context otherwise requires, - (18) 'company in which public are substantially interested'-a company is said to be company in which public are substantially interested - (a) if it s company owned by Government or Reserve Bank of India or in which not less than forty per cent of shares are held (whether singly or taken together) by Government or Reserve Bank of India or corporation owned by that bank; or (aa) if it s company which is registered under section 25 of Companies Act, 1956 (1 of 1956); or (ab) if it is company having no share capital and if, having regard to its objects, nature and composition of its membership and other relevant considerations, it is declared by order of Board to be company in which public are substantially interested: Provided that such company shall be deemed to be company in which t h e public are substantially interested only for such assessment year or assessment years (whether commencing before 1st day of April, 1971, or on or after that date) as may be specified in declaration; or (b) if it is company which is not private company as defined in Companies Act, 1956 (1 of 1956), and conditions specified either in item (A) or in item (B) are fulfilled, namely:- (A) shares in company (not being shares entitled to fixed rate of dividend whether with or without further right to participate in profits) were, as on last day of relevant previous year, listed in recognized stock exchange in India in accordance with Securities Contracts (Regulation) Act, 1956 (42 of 1956) and any rules made thereunder; (B) shares in company (not being shares entitled to fixed rate of dividend whether with or without further right to participate in profits) carrying not less than fifty per cent of voting power have been allotted unconditionally to, or acquired unconditionally by, and were throughout relevant previous year beneficially held by - (a) Government, or (b) corporation established by Central, State or Provincial Act or, (c) any company to which this clause applies or any subsidiary company of such company where such subsidiary company fulfils conditions laid down in clause (b) of section 108 (hereafter in this clause referred to as subsidiary company). Explanation: In its application to Indian company whose business consists mainly in construction of ships or in manufacture or processing of goods or in mining or in generation or distribution of electricity or any other form of power, item (B) shall have effect as if for words 'not less than fifty per cent' and 'more than fifty per cent' words 'not less than forty per cent' and 'more than sixty per cent' had, respectively, been had been substituted;' 11. On reading of this provision it is apparent that company in which public is substantially interested is said to be company which is enumerated in various clauses of this definition clause, viz., (i) company owned by Government or Reserve Bank of India or in which not less than forty per cent of shares are held (whether singly or taken together) by Government or Reserve Bank of India or corporation owned by that bank; or (ii) company which is registered under section 25 of Companies Act, 1956 , or company which is registered under section 25 of Companies Act, 1956 , or (iii) company having no share capital and it is declared by order of Board to be company in which public are substantially interested; or (iv) company which is not private company as defined in Companies Act, 1956 (1 of 1956), and conditions specified either in item (A) or in item (B) are fulfilled, namely (A) shares in company (not being shares entitled to fixed rate of dividend whether with or without further right to participate in profits) were, as on last day of relevant previous year, listed in recognized stock exchange in India in accordance with Securities Contracts (Regulation) Act, 1956 (42 of 1956) and any rules made thereunder; (B) shares in company (not being shares entitled to fixed rate of dividend whether with or without further right to participate in profits) carrying not less than fifty per cent of voting power have been allotted unconditionally to, or acquired unconditionally by, and were throughout relevant previous year beneficially held by Government, or corporation established by Central, State or Provincial Act or, any company to which this clause applies or any subsidiary company of such company where such subsidiary company fulfils conditions laid down in clause (b) of section 108. 12. provision as it stood prior to present one and as was subject matter of consideration of Bombay High Court read as under: '2. In this Act, unless context otherwise requires, - (18) 'company in which public are substantially interested' - company is said to be company in which public are substantially interested - (a) if it s company owned by Government or Reserve Bank of India or in which not less than forty per cent of shares are held (whether singly or taken together) by Government or Reserve Bank of India or corporation owned by that bank; or (aa) if it is company which is registered under section 25 of Companies Act, 1956 (1 of 1956); or (ab) if it is company having no share capital and if, having regard to its objects, nature and composition of its membership and other relevant considerations, it is declared by order of Board to be company in which public are substantially interested: Provided that such company shall be deemed to be company in which t h e public are substantially interested only for such assessment year or assessment years (whether commencing before 1st day of April, 1971, or on or after that date) as may be specified in declaration; or (b) if it is company which is not private company as defined in Companies Act, 1956 (1 of 1956), and conditions specified either in item (A) or in item (B) are fulfilled, namely:- (A) shares in company (not being shares entitled to fixed rate of dividend whether with or without further right to participate in profits) were, as on last day of relevant previous year, listed in recognized stock exchange in India in accordance with Securities Contracts (Regulation) Act, 1956 (42 of 1956) and any rules made thereunder. (B)(i) shares in company (not being shares entitled to fixed rate of dividend whether with or without further right to participate in profits) carrying not less than fifty per cent of voting power have been allotted unconditionally to, or acquired unconditionally by, and were throughout relevant previous year beneficially held by (a) Government, or (b) corporation established by Central, State or Provincial Act or, (c) any company to which this clause applies or any subsidiary company of such company where such subsidiary company fulfils conditions laid down in clause (b) of section 108, (d) public (not being director, or company to which this clause does not apply); (ii) said shares were, during relevant previous year, freely transferable by holder to other members of public; and (iii) affairs of company or shares carrying more than fifty per cent held by five or less persons. Explanation 1 - In computing number of five or less persons aforesaid, - (i) Government or any corporation established by Central, State or Provincial Act or company to which this clause applies or subsidiary company of such company shall not be taken into account, and (ii) persons who are relative of one another, and persons who are nominees of any person together with that other person, shall be treated as single person. Explanation 2 - In its application to Indian company whose business consists mainly in construction of ships or in manufacture or processing of goods or in mining or in generation or distribution of electricity or any other form of power, item (B) shall have effect as if for words 'not less than fifty per cent', words 'not less than forty per cent' had been substituted.' 13. It may be noted that portion typed (d), (ii), (iii) and Explanation 1 was omitted by amendment in 1984 and requirement of holding shares by public, freely transferability by holder to other members of public; and control of affairs of company or holding of shares at no time by five or less persons carrying more than fifty per cent of its total voting power. 14. Under earlier provisions matter came up for consideration before Bombay High Court in case of Indian Hotels Co. Ltd. (supra), company claimed that it should be treated as 'company in which public are substantially interested' in terms of section 2(18) of Income-tax Act, 1961 on ground that majority of shares (78.71) were held by public charitable trusts. ITO did not accept this contention of assessee. AAC also rejected contention of assessee-company and he held that since more than 50 per cent of voting power is held by three persons (public trusts), company was caught by mischief of section 2(18)(b)(iii). Tribunal declined to accept argument that as 81 per cent of shares of company were held by three public charitable trusts, shares should be taken to have been held by public for purpose of section 2(18) of Act. Tribunal held that in case of trust, trustees have merely to carry out wishes of settlor and beneficiaries have no say as to how those wishes have to be carried out and if shares of: company are held by charitable trusts, primarily, voting power in respect of those shares will be governed by directions given by settlor and in absence of such directions, voting power will be exercised according to wishes of trustees. alternative argument was also advanced before Tribunal on behalf of assessee-company that having regard to provisions of section 187B of Companies Act, 1956, shares, in respect of which voting power is exercisable by public trustee under that section, should be regarded as held by 'public'. This alternative argument was accepted by Tribunal, which took view that under section 187B of Companies Act, in case of every trust, rights and powers including right to vote exercisable at any meeting of company of which shares are held by trust, shall be exercisable by public trustee and since, public trustee was nominee of Government and Government would represent people, it could be said that voting power in respect of shares held by trust is ultimately exercisable by Government on behalf of public and so, shares were held by public. Having accepted alternative argument advanced before it Tribunal came to conclusion that as shares in assessee-company were held by three trusts, same can be said to be held by public and assessee- company should be held as company in which the, public are, substantially interested. 15. At instance of revenue question referred to Bombay High Court was: 'Whether assessee-company, is company in which public are substantially interested as majority of shares are held by charitable trusts.' High court rejected claim on both ground. As regards alternate arguments it held that limited effect of section 187B is that rights and powers exercisable at meeting of company or at any meeting of any class of members of company cease to be exercisable by trustee and those rights and powers become exercisable by public trustee. scope of section 187B is, therefore, of very limited character. It does not have effect of divesting trustee who is shareholder of all rights which vest in him as shareholder. trustee does not cease to be member of company and section 187B does not have effect of substituting public trustee as member of company in place of trustee who holds shares as trustee. If member is not divested of shares held by him and only his right to vote which he exercises as member of company at any meeting is taken away and vested in public trustee, it is difficult to appreciate view taken by Tribunal that because public trustee exercises right to vote, right to vote must be treated as being exercised by Government itself and further that since Government acts on behalf of public at large, shares must be treated as having been held by public. Apart from fact, that, as we shall presently point out, word 'public' is used in particular sense in section 2(18), ground on which Tribunal has held that assessee company must be treated as company in which public are substantially interested is wholly untenable and view of Tribunal is based on misconception of scope, purpose and effect of section 187B of Companies Act. As regards main ground, court noted contention of Mr. Vyas that provisions of section 2(18) must be reasonably construed; that beneficiaries under three trusts, who held shares, were members of public and on reasonable construction of provisions of section 2(18), it must be held that shares were acquired by trustees as members of public and were held for benefit of public; that though, shares were held by person, it was possible that beneficial interest in those shares is held by members of public and shares standing in names of trustees must be held as having been acquired by members of public; that for purposes of section 2(18) of Act it is enough that shares are held by public and in case where there are beneficiaries of public trust, shares must be treated as being beneficially held by beneficiaries through trusts; that in such case, voting power vests in public but through trustees; that statute must be reasonably construed and construction in consonance with justice should be adopted. High Court observed that while it is hard to dispute proposition that tax laws are to be interpreted reasonably and in consonance with justice, it is also well established that any equitable considerations are wholly irrelevant in interpreting tax laws. 16. Quoting Raghuvanshi Mills. Ltd. v. CIT [1961] 41 ITR 613 (SC), Bombay High Court that observations of Supreme Court will thus indicate that when definition in section 2(18)(b) requires that prescribed number of shares should be beneficially held by public, it contemplates that person must hold shares for his own benefit and no person who holds share or shares not for his own benefit but for benefit of another will fall within body which is designated 'public' in section 2(18)(b)(i). One of important considerations, therefore, for deciding whether company can be said to be company in which public are substantially interested is whether prescribed number of shares are held by member concerned for his own benefit or for benefit of another. 'Beneficially holding share' is not same thing as 'holding share for benefit of another' or 'some other person being beneficiary of share', as contended for assessee. court also noted observations of Supreme Court that word 'public' is used in contradistinction with one or more persons who act in unison and amongst whom voting power constitutes block. Therefore, one of other important considerations which has to be taken into account while applying definition in section 2(18)(b) is whether there are one or more persons who act in unison and amongst whom voting power constitutes block and only those members of public who are outside this block will, therefore, be covered by 'public' as contemplated by section 2(18)(b) of Act. This is made further clear by Supreme Court in CIT v. Jubilee Mills Ltd. [1963] 48 ITR 9. Referring to observation in decision in Raghuvanshi Mills Ltd. v. CIT [1961] 41 ITR 613 (SC), Bombay High Court noted that ...what one has to find out is whether there is individual who, or group acting in concert which, controls or control affairs of company to exclusion of others by reason of his or their voting power. Such person or group of persons do not answer description 'public'. 17. court held that scope and nature of enquiry which is contemplated when determining whether company is company in which public are substantially interested were laid down by Supreme Court in CIT v. East Coast Commercial Co. Ltd. [1967] 63 ITR 449 while dealing with v. East Coast Commercial Co. Ltd. [1967] 63 ITR 449 while dealing with provisions of section 23A(1) of Indian Income-tax Act, 1922. These were: 'It is clear that in deciding whether order under section 23A(1) is called for, Income-tax Officer must determine (i) whether there is individual or group which can control voting power as block. existence of such block may be established by showing that voting power is vested in persons possessing more than fifty per cent of shares issued who act in concert; and (ii) that block exercises controlling interest over affairs of company. This condition is satisfied only if voting power of block or group is seventy five per cent, or more. If block holds seventy five per cent of voting power, it shall be deemed that company is one in which public are not substantially interested. On other hand, if members of public hold shares of company (not being shares entitled to fixed rate of dividend, whether with or without further right to participate in profits), carrying not less than twenty- five per cent of voting power allotted unconditionally to, or acquired unconditionally by them, company shall be deemed to be one in which public are substantially interested.' 'Now, arguments before Tribunal in instant case had proceeded on footing that 81 per cent of shares held by three public trusts must be treated as being held by public. As indicated by decisions referred to above, two questions will have to be answered. Firstly, whether there is any group of shareholders who can be considered as block and whose voting power is more than 50 per cent and, secondly, are 50 per cent of shares acquired unconditionally and beneficially held by public. As matter of fact, any view which we may take on argument which is advanced before us at considerable length on behalf of assessee that shares held by trustees must be treated as shares held by public, would be sufficient to answer question referred to us in this reference. We have repeatedly tried to ascertain from Mr. Vyas as to whether shares held by three trusts, which between themselves hold about 81 per cent of shares and they are undoubtedly group of Tata Charities, can be said to have been beneficially held by any particular person and we have been repeatedly told that public in general, who are beneficiaries under trusts, are beneficial holders of these shares. This runs counter to decisions of Supreme Court. As already pointed out, if person does not hold share for his own benefit, that person must fall out of category of 'public', as contemplated by definition in section 2(18) of Act. Admittedly, shares are held by trustees in their own names, but they are admittedly not beneficial holders of shares. If shares are not held by trustees for their own benefit and they are held for benefit of somebody else, on law laid down by Supreme Court, they must be out of category of 'public'. total number of shares held by these three trusts comes to about 81 per cent. This by itself will rule out any possibility of prescribed 50 per cent of shares being held by public.' 18. shares are also not acquired by beneficiaries. shares are acquired by trustees for beneficiaries. conclusion as held by High Court to be inescapable that 81 per cent of shares which are held by trustees for beneficiaries under public trusts cannot be said to be shares held by public. It further held that even so far as controlling interest was concerned, it was difficult to resist conclusion that three public trusts hold controlling interest in company. No doubt, some of trustees in three trusts are different. But so far as Lady Tata Memorial Trust and Sir D.J. Tata Trust were concerned, court observed that three trustees were common and first trust had 1,400 shares, and second trust had 2,995 shares. As matter of fact in all three trusts, first name of trustee, which would normally be name first recorded as holder of shares, was same, namely, Lady Navajbai Ratan Tata. Normally, these trustees would be expected to act in concert. Similarly, remaining shares are held either by Tata Sons Pvt. Ltd. to extent of 1,051, that person and there are 8 such groups of 6 shares each, out of which joint holders in 4 groups are trustees in one or other trust. Looking at manner in which shares are held, either way, it was held that therefore, prescribed 50 per cent of shares, as required by clause (i) of section 2(18)(b), could not be said to be held by public. If this condition is not satisfied, then irrespective of question as to whether second or third condition is satisfied or not, company will not be one which falls within section 2(18)(b) of Act. 19. expression 'company in which public are substantially 19. expression 'company in which public are substantially interested' came up before Supreme Court in CIT v. Amrutanjan Ltd. [1964] 53 ITR 218 with reference to provisions of section 23A of Indian Income-tax Act, 1922. Court after noticing fact that Act did not define explained it as: 'Normally company would be deemed to be one in which public are substantially interested, where more than half voting power is vested in public. Where controlling interest, i.e., minimum of fifty-one per cent of voting rights is held by single individual or group of individuals acting in concert, company would be regarded as one in which public are not substantially interested.' 20. There was Explanation to this section 23A of 1922 Act, based on which Revenue contended that Explanation is in reality clause which defines what company, in which public are substantially interested, is. Explanation read: 'For purpose of this sub-section,- company shall be deemed to be company in which public are substantially interested if shares of company (not being shares entitled to fixed rate of dividend, whether with or without further right to participate in profits) carrying not less than twenty-five per cent of voting power have been allotted unconditionally to, or acquired unconditionally by, and are at end of previous year beneficially held by, public (not including company to which provisions of this sub-section apply)...' 21. court answered question by stating: 'In terms, however, Explanation raises presumption and does not purport to define company in which public are substantially interested.' court then explained as to what company in which public are substantially interested, is and that is that 'Normally company would be deemed to be one in which public are substantially interested, where more than half voting power is vested in public. Where controlling interest, i.e., minimum of fifty-one per cent, of voting rights is held by single individual or group of individuals acting in concert, company would be regarded as one in which public are not substantially interested.' 22. contention of Ld. Counsel of assessee that fact that substantial shareholding to extent of 78.71 per cent in assessee company is in hands of four public trusts, which had been functioning in accordance with law and in public interest is not in dispute. In these trusts according to him, fact that public are directly interested is clearly established under applicable statute, namely, Bombay Public Trust Act, 1950 may be true because in public trusts, admittedly beneficiaries are members of general public and, therefore, under section 2(10) every member of public has to be regarded as 'person having interest' and this fact coupled with right of every member of public under section 41B to file complaint, resulting in Charity Commissioner exercising his power to institute enquiry with regard to affairs of trust and that every member of public has right to resort to provisions of section 50 that may result in filing of appropriate suit in appropriate Court for redress of justice. above statutory provisions and fact do not establish that every member of public has substantial interest in assessee company through public trusts. It may be that general public are beneficiaries in public trust and are persons interested in public trust in view of Supreme Court in decision of Deoki Nandan v. Murlidhar AIR 1957 SC 133 as also decision of Lahore High Court in case of Nihal Chand v. Narain Das AIR 1934 Lahore 949, but that does not mean that public are substantially interested in company of which shares are held by four charity trusts. It is trust as such that could be said to have substantial interest in company and not beneficiaries thereof. Trusts being 4 only who hold more than 50 per cent (exactly 78.71 per cent), it cannot be said that public are substantially interested in company. Holding of more than 50 per cent shares by 4 persons cannot be equated with such holding by public. Let us have case of company, private Ltd. or public company to which this section does not apply, or registered society or cooperative society that are entity by themselves, independent and separate to its members like trusts. In each of these entity, be it company or society, their members have interest. If they held shares in company can it be said that their members are holding shares in that company and since they have interest in these companies or societies, they are public and company whose shares are so held is company in which public are substantially interested? Certainly not. Shares would said to be held only by these entities which hold shares and if they individually or cumulatively can constitute public company could be company in which public are substantially interested and not because their members who have interest in these companies or societies or trusts are many or public at large. Their interest in these companies or societies or trusts cannot make them to have interest in company whose shares their parent companies or societies or trusts hold. Members and these companies or societies or trusts have their separate entities independent to each other. By mixing them one would be ignoring reality and their individual and separate entity in law. 23. It may be true that none of arguments that were raised here were before Bombay High Court but jurisdictional High court decision cannot be ignored by this fact. It does not loose its binding force merely because some argument was not raised or raised not in particular way. It might be that High Court in that case was concerned with statutory provision that no longer exists for assessment year under consideration. But that decision has interpreted words 'held by' and in that connection it was held that shares held by public trusts cannot be construed as held by public. trust even though for benefit of public in nature cannot be equated with public. It is ratio of decision that is material for it is ratio that binds, as precedent and not conclusion. 24. term 'held by' might be as stated ld. Counsel narrower concept than concept 'substantially interested'. But both are associated with public and public trusts are held to not public in itself it gives same result, in first case shares held by public and in later case where public is substantially interested. If trusts are not public, both fail. It may not be out of place to mention that clause (d) in earlier definition 2(18)(b)(B) making holding of shares by public which was subject matter of consideration of Bombay High Court was deleted, though by certain more companies were included under coverage of section 2(18) of Act. That shows that even when public holding was one of criteria to determine character of company in which public are substantially interested shareholding by trust was not held to be public it would all more logical that such shareholding by trust does to be public it would all more logical that such shareholding by trust does not be taken as criteria when such requirement of holding by public is deleted from definition of such company. 25. Mr. Vyas further submitted that courts are entitled to resort to ordinary and natural meaning of term and that courts should refrain from destroying basic concept or essential meaning of term in light of abundant legal material available in this regard. He referred to Craies on Statute Law, observations on page 214 as follows: 'An interpretation clause which extends meaning of word does not take away its ordinary meaning ... interpretation clause of this kind is not meant to prevent word receiving its ordinary, popular, and natural sense whenever that would be properly applicable, but to enable word as used in Act, when there is nothing in context or subject-matter to contrary, to be applied to some things to which it would not ordinarily be applicable... It is perfectly consistent with that, that they should be read as applicable, and should be applied, to those things to which they in their natural sense apply, and which do not require any interpretation clause to bring them in. interpretation clause, said Lush J. in R.V. Pearce, should be used for purpose of interpreting words which are ambiguous or equivocal, and not so as to disturb meaning of such as are plain, or as Lora Coleridge said in London School Board v. Jackson so as to prevent operation of word in its primary and obvious sense.' According to him above view finds support from several cases decided under taxation laws as well. Supreme Court in CGT v. N.S. Getti Chettiar [1971] 82 ITR 599 quoted with approval above observation of Craies on Statute Law and has on page 605 observed as under: 'As observed in Craies on Statute Law (sixth edition, page 213), interpretation clause which extends meaning of word does not take away its ordinary meaning. interpretation clause is not meant to prevent word receiving its ordinary, popular and natural sense whenever that would be properly applicable, but to enable word as used in Act, when there is nothing in context or subject-matter to contrary, to be applied to somethings to which it would not ordinarily be applicable.' Punjab and Haryana High Court in CIT v. Strawboard Mfg. Co. Ltd. [1975] 98 ITR 78 (affirmed by Supreme Court in CIT v. Strawboard Mfg. Co. Ltd. [1989] 177 ITR 431 has reiterated above view having followed Supreme Court decision in case of Getti Chettiar. On page 84 Punjab and Haryana High Court has quoted above observations of Supreme Court. jurisdictional Bombay High Court has also in CGT v. Dr. R.B. Kamdin [1974] 95 ITR 476 reiterated above view by observing that essential meaning or basic idea of term must be borne in mind while interpreting it and on page 481-82 observed as under: 'It (Supreme Court) further observed that where, within framework of ordinary acceptation of word, every single requirement of definition clause was fulfilled, it would be wrong to take definition as destroying 'essential meaning' of that word. With respect, I agree with approach commended in judgments delivered in both these cases'. In view of above discussion, it is necessary to resort independently to natural and ordinary meaning of term 'company in which public are substantially interested', in present appeal. 26. argument has no force. As aforesaid public at large having interest in these trusts cannot be said to have interest in company when shares in that are held by these trusts and therefore it is not case of destroying natural and ordinary meaning of term. Even as per natural and ordinary meaning of term 'a company in which public are substantially interested' shares held by charitable trusts cannot make their members to have interest in company. 27. Mr. Vyas further submitted that in view of opening words of section 2 namely 'unless context otherwise requires', provisions of section 2(18) are not to be regarded as sacrosanct and, therefore, assessee can be treated as 'company in which public are substantially interested' even if it does not fall within additional categories of such companies as enumerated i n section 2(18). He relied upon Supreme Court decision in K.V. Muthu v. Angamuthu Ammal [1997] 2 SCC 53, wherein Supreme Court noted in context of definition in section 2(6A) of 1922 Act that normally use of term 'means' makes definition exhaustive one but such exhaustive definition is to be departed from if definition section opens with words 'unless context otherwise requires' if there be something in context to show that definition could not be applied. In this decision itself mentioned 'while interpreting definition, it has to be borne in mind that interpretation placed on it should not only be not repugnant to context, it should also be such as would aid achievement of purpose which is sought to be served by Act. construction which would defeat or was likely to defeat purpose of Act has to be ignored and not accepted.' Nothing is pointed out in this connection out which can depart one take case in ken of company in which public are substantially interested. similar approach was adopted in Ashok Kapil v. Sona Ullah [1996] 6 SCC 342, where relevant term 'building' is defined with use of expression 'means' and where definition section opened with words 'unless context otherwise requires' building without roof was taken as building because such variations was necessary to achieve object of enactment. In ITO v. Chandmull Batia [1978] 115 ITR 388 (Cal.), court was concerned with provisions of section 2(22)(e) of Act and that connection it held that it is loan given to registered shareholder which would attract provisions of section 2(22)(e). Companies Act, 1956, by section 153 does not recognize any trust or beneficial interest of person in any share. There also beneficial holding was not recognized for purposes of deemed dividend which is even inclusive definition. 28. In CIT v. Harrisons Crossfield (India) Ltd. [1996] 220 ITR 494 (Ker.) Revenue contended that Tribunal has entered clear finding to effect that five persons did hold (less than six) 50 per cent of voting power in assessee-company, that this finding was entered on consideration of provisions of section 2(18)(b)(B)(iii) of Act and that after entering such clear finding Tribunal was not justified in approaching question in different manner with reference to purpose and in holding that company is one in which public are substantially interested. attention of court was drawn to decision of Supreme Court in Punjab Produce & Trading Co. Ltd. v. CIT [1971] 82 ITR 619. court answered question referred in favour of assessee and against Department and held that: 'We could not find any assistance from said decision so far as this case is concerned. question for consideration in Supreme Court decision was entirely different from one for consideration in present case. In that case, in applicant-company shares carrying more than 50 per cent of total voting power were held by less than six persons. In that case there was no dispute regarding fact that less than six persons held more than 50 per cent of voting power of company on permanent basis. only thing was that decision was taken by company in its meeting that no dividend need be declared for which no reasons have also been stated. On other hand, on t h e above facts, question was as to whether twin conditions of proviso to section 23A of Indian Income-tax Act, 1922, which is in pari materia according to learned counsel for Department with section 2(18)(b)(B)(iii) of Act are to be cumulative or is it sufficient that any one of conditions is satisfied? In this case, factual matrix is entirely different in that initial formation and allotment of shares to seven persons was only temporary arrangement and that permanent basis depending on final order to be passed by this court in amalgamation order and scheme. We are of view that Tribunal was justified in not taking literal approach and i n deciding matter keeping in view purpose behind provision, or, in other words, purposive approach in deciding question. We entirely agree with concurrent reasoning of two appellate authorities and hold that assessee-company is company in which public are substantially interested and accordingly entitled to reduced rate of tax. It may be noted that there were certain circumstances already in existence that persuaded court to take that into consideration for determining character of company as against literal meaning to be subscribed as per fact appearing in that year itself. Nothing of that sort is appearing in this case to consider and dilute plain meaning of term. 29. Here we may quote observations in Modipon Ltd. v. CIT [2001] 247 29. Here we may quote observations in Modipon Ltd. v. CIT [2001] 247 ITR 40, Delhi High Court which quoted following observations of State of Bombay v. Automobile & Agrl. Industries Corpn. [1961] 12 STC 122(SC) 'But courts in interpreting taxing statute will not be justified in adding words thereto so as to make out some presumed object of Legislature..., If Legislature has failed to clarify its meaning by use of appropriate language, benefit thereof must go to taxpayer. It is settled law that in case of doubt, that interpretation of taxing statute, which is beneficial to taxpayer must be adopted.' 30. It is cardinal principle in construction of enactments that, unless context otherwise requires, definition of expression contained in Act should prevail throughout Act. Whenever different meaning is sought to be given to that expression occurring at different places in Act, it is necessary to point out why context requires different meaning to be given to same expression occurring at different places in Act. (Reference is invited to decision in case of CIT v. Dredging Corpn. of India [1988] 174 ITR 682 at page 687 (AP). 'Unless context otherwise requires' means that should have been used elsewhere in Act in different context. If we were to interpret those words in that context, one may ignore definition given under section 2(18) of Act. 31. Mr. Vyas further contended that whereas term 'means' is exhaustive in nature, expression 'is said to be' is illustrative in nature. Section 2(18) uses expression 'is said to be' and not term 'means'. Therefore, categories of companies- expressly specified in section 2(18) are illustrative and are in addition to those companies, which are on ordinary and natural meaning, companies in which public are substantially interested. There is no force in this argument of assessee. words 'is said to be' certainly cannot be equated with term 'include' so as to make definition as inclusive one and leaving scope of general meaning which is not stated in ambit of definition. term 'is said to be' gives impression that it is used to give exhaustive description of term 'a company in which public is substantially interested'. It is more near to denoting to same thing as word 'means'. It is more so when one reads it with opening words 'unless context otherwise require'. intention of Legislature in drafting section 2(18) could well have read as 'a company in which public are substantially interested' means enumerated companies. It is true that instead of using term 'means', Legislature used term 'is said to be', but that does not make any difference as it is in contradiction to word 'include'. This does not leads us to conclude that Legislature did not intend to travel beyond normal meaning of company in which public is substantially interested. It is true that most of categories mentioned in section 2(18) of Act, are of nature as would not have otherwise also been categorised as widely held companies. As illustration, we take clause (a) of section 2(18). According to said clause, company in which at least 40 per cent of shares are held by Government etc., it is regarded as widely held company, even though it have been registered as Private Company. Similarly, if we consider clause (aa), it includes company which is registered under section 25 of Companies Act, 1956. These companies are generally entitles like chambers of commerce, clubs etc. which are essentially non-profit making concerns and in absence of share capital, in ordinary sense of term, it could not have been classified as widely- held company. But these are specific inclusions in definition and cannot drive home proposition that by using term 'is said to be', Legislature has tried to rope in certain categories of companies which otherwise would not have been regarded as companies in which public are substantially interested. result could have flowed if Legislature used term 'mean' instead of 'is said to be'. 32. Mr. Vyas then referred to decision of Supreme Court in Printers (Mysore) Ltd. v. Asstt. CTO [1994] 2 SCC 434 rendered in context of concessional rate of tax, decision in case of N.K. Jain v. C.K. Shah [1991] 2 SCC 495 dealing with welfare legislation; decision in Workmen of American Express International Banking Corpn. v. Management of American Express International Banking Corpn. AIR 1986 SC 458; three Judge Bench of Supreme Court in Vanguard Fire & General Insurance Co. v. Fraser and Ross AIR 1960 SC 971; several tax cases including CIT v. B.C. Srinivasa Setty [1981] 128 ITR 294 (SC). Bombay High Court in Ritz Ltd. v. CIT [1995] 216 ITR 138. discussions on above cases compel one to look into provisions of section 2(18) in relevant context. It is clear that concessional rate of taxation was provided in Finance Act to company in which public are substantially interested and, therefore, it is one's duty to ensure that this legislative intention is fulfilled. rate undoubtedly was concessional in comparison to rates for other companies. If it were not intention of Legislature to provide concession, it would have adopted same uniform rate for all companies. above cases require one to adopt natural and ordinary meaning of term 'company in which public are substantially interested', in present context of concessional rate of tax. Again, as mandated by aforesaid series of decisions of Supreme Court and in light of statutory mandate contained in section 2, one has to look into context of concessional rate of tax, context of section 2(18) itself whose close examination leads one to believe that cases enumerated therein are such which may not ordinarily be regarded as cases of companies in which public are substantially interested. They appear to be additions to term 'company in which public are substantially interested as ordinarily understood. It is quite possible to conclude that without express inclusion in section 2(18), such companies may not be regarded as companies in which public are substantially interested. Keeping in mind factual position that substantial shareholding to tune of 78.71 per cent of assessee is held by public trusts, one should conclude that assessee is company in which public are substantially interested. Examining legal issue from all aspects, ld. Counsel submitted that law appears to be self evident and covered by several pronouncements of Supreme Court and as far as facts here are concerned, it has not been disputed that public trusts have promoted and protected public interest in national arena. above conclusion is fully consistent with obvious intention of Legislature and is capable of being arrived at without doing any violence whatsoever to language and statute. Relying on decision of Supreme Court in CIT v. Strawboard Mfg. Co Ltd. [1989] 177 ITR 431, it can be argued that in context of law providing for concessional rate of tax, literal construction should be avoided. 33. In these cases, courts held that it is not mandatory that one should mechanically attribute to it meaning assigned to it in definition clause and where context does not permit or where it would lead to absurd or unintended result, definition of expression need not be mechanically applied. No absurdity is seen in this case in adopting meaning given in definition clause. Supreme Court observed that 'The opening words in section 2 viz. 'In this Act, unless context otherwise requires' must be examined in light of context, title, preamble and all other enacting parts of statute. Due weight ought to be given to opening words. subject matter and context in which particular word is used are of great importance and it is axiomatic that object underlying Act must always be kept in view in construing context in which particular word is used. So construed there is much in context to show that restricted meaning in definitions should not be applied.' It may be that even where definition is exhaustive inasmuch as word defined is said to mean certain thing, it is possible for word to have some what different meaning in different sections of Act depending upon subject or context. Further, that definition or interpretation clause which extends meaning of word should not be construed as taking away its ordinary meaning is proposition well established by cases of CGT v. N.S. Getti Chettiar [1971] 82 ITR 599 (SC); CIT v. Strawboard Mfg. Co. Ltd. [1975] 98 ITR 78 (Punj. & Har.) and Jagatram Ahuja v. CGT [2000] 246 ITR 609 (SC). But in this case as held above there is no ordinary meaning which can be ascribed to term 'a company in which public are substantially interested' therefore these cases are of no help to assessee. There is thus no destruction of basic concept or essential meaning of expression defined. 34. theory that this section only seeks to enlarge and add additional categories in term 'company in which public are substantially interested' cannot be accepted. Section 2(18) does not include but defines what company in which public are substantially interested is said to be. On above analysis, it is clear that in relation to each of above categories, it was doubtful whether such companies could definitely be regarded as 'company in which public are substantially interested' and it is precisely for this reason that Legislature expressly included them in section 2(18). This is not so if we see circular for amendment in 1971 encompassing various categories in definition clause: '3 it satisfies various tests laid down in definition of terra in section 2(18) of Income-tax Act. Broadly speaking, aim of these tests is to decide whether there is wide public participation in ownership of shares in, and control over affairs of company. Entities like Chambers of Commerce, Clubs, etc. which are declared to be 'companies' by Board under relevant provisions of Income-tax Act, are essentially non-profit making concerns and in absence of share capital, in ordinary sense of term, it is not practicable to apply to such entities tests of 'company in which public are substantially interested'. same difficulty arises with regard to companies limited by guarantee.' 35. It was in order to obviate these difficulties definition of 'company in which public are substantially interested' in section 2(18) has been amended in order to provide that company which is registered under section 25 of Companies Act (i.e. company having for its object promotion of, commerce, art, science, religion, charity or any other useful object and which prohibits payment of dividends to its members) will be regarded as company in which public are substantially interested without application of various tests as to composition of ownership of shares in, and control over affairs of, company. Further, in order to cover entities which are not registered as companies but are declared to be companies for tax purposes and to companies limited by guarantee which are not registered under section 25, CBDT has been empowered to direct that any such entity or company shall be treated as company in which public are substantially interested having regard to objects of company, nature and composition of its membership and other relevant considerations. 36. Notes on Clauses of Finance Bill, 1983 may also be referred to for amended provisions which is applicable to impugned year. It reads: 'Sub-clause (b) seeks to amend clause (18) of section 2 of Income- tax Act. Under proposed amendment, company whose shares are not listed in recognised stock-exchange in India in accordance with Securities Contracts (Regulation) Act, 1956, and any rules made thereunder will not be treated as company in which public are substantially interested unless shares in company (not being shares entitled to fixed rate of dividend whether with or without further right to participate in profits) carrying not less than fifty per cent, of voting power have been allotted unconditionally to, or acquired unconditionally by, and were throughout relevant, previous year beneficially held by- Government, or corporation established by Central, State or Provincial Act, or any company to which clause applies or any subsidiary company of such company if whole of share capital of such subsidiary company has been held by parent company or by its nominees throughout previous year. proposed modification will, however, not apply in relation to following categories of companies:- (i) company owned by Government or Reserve Bank of India in which not less than forty per cent, of shares are held (whether singly or taken together) by Government or Reserve Bank of India or corporation owned by that Bank; (ii) company which is registered under section 25 of Companies Act, 1956; (iii) company having no share capital, which is declared by 'Central Board of Direct Taxes to be company in which public are substantially interested. These companies will continue to be regarded as companies in which public are substantially interested. These amendments will take effect from 2nd April, 1983". 37. Memorandum explaining provisions state as under: 'Definition of 'widely-held company' 138. Under existing provisions of Income-tax Act, company is regarded as company in which public are substantially interested (i.e., widely-held company) if it is company in which aggregate shareholding of Government or Reserve Bank of India or corporation owned by that bank is 40 per cent, or more of total share capital of company; or it is company registered under section 25 of Companies Act; or it is company having no share capital and it has been declared by Central Board of Direct Taxes to be widely-held company; or it is public limited company within meaning of Companies Act, 1956, and it fulfils conditions specified in this regard in Income-tax Act. 139. conditions which last category of companies have to fulfil are that, either (i) equity shares of company should, as on last date of relevant year, be listed in recognised stock exchange in India, or (ii) equity shares carrying not less than 50 per cent, of voting power should be beneficially held by:- (a) Government, or (b) statutory corporation, or (c) any other widely-held company or wholly owned subsidiary of such company, or (d) public (other than director of company or closely-held company). 140. Two other conditions laid down are that shares of company should be freely transferable by holders to other members of public and affairs of company or shares carrying more than 50 per cent, of its total voting power should, at no time during relevant previous year, be controlled or held by five or less persons. For purposes of determining whether affairs of company or shares in company are controlled or held by five or less persons, persons, who are relatives of one another and persons who are nominees of any other person together with that person are treated as single person. 141. Under proposed amendment, company whose shares are not listed in recognised stock exchange in India will not be treated as widely- held company. However, company whose equity shares carrying not less than 50 per cent, of voting power are held by Government, statutory corporation, or another widely-held company or wholly owned subsidiary of such company, will continue to be regarded as widely-held company. It is also being provided that, as at present, companies in which aggregate shareholding of Government or Reserve Bank of India or corporation owned by that bank is not less than 40 per cent, companies registered under section 25 of Companies Act and companies without share capital which are declared by Central Board of Direct Taxes to be widely-held companies will continue to be regarded as widely-held companies. 142. This amendment will take effect from 1-4-1984, and will accordingly apply in relation to assessment year 1984-85 and subsequent years.' 38. CBDT in its Circular No. 372 dated 8-12-1983 has explained provisions as under: '9.1 Section 2(18) of Income-tax Act defines expression 'Company in which public are substantially interested' (that is, widely-held company). Sub-clauses (a), (aa) and (ab) of said definition deal with special categories of companies (e.g. Government-owned companies, companies registered under section 25 of Companies Act, 1956, companies having no share capital) which are regarded as widely-held companies. Sub-clause (b), which is applicable in generality of cases, provides that company will be regarded as widely-held company if it is not private company as defined in Companies Act, 1956, and it fulfils either conditions specified in item (A) or in item (B) of said clause. condition specified in item (A) aforesaid is that shares in company (not being shares entitled to fixed rate of dividend) were, as on last day of relevant previous year, listed in recognised stock exchange in India in accordance with Security Contracts (Regulation) Act, 1956, and rules made thereunder. company which does not fulfil condition laid down in item (A) has to fulfil three conditions specified in item (B). 9.2 Finance Act has substituted item (B) by new item. effect of substituted item (B) will be that where shares of company are not listed in recognised stock exchange in India as on last day of relevant previous year, company will not be regarded as widely-held company, unless shares in company (not being shares entitled to fixed rate of dividend) carrying not less than 50 per cent, of voting power (40 per cent, in case of Indian companies engaged in manufacturing activities, etc.) have been allotted unconditionally to, or acquired unconditionally by, and were throughout relevant previous year beneficially held by Government, or statutory corporation, or widely-held company or wholly owned subsidiary of such company. If requisite percentage of shares of company are not so held, company would be regarded as closely-held company even though fifty per cent, or more of its shares are held by public generally.' 39. In view of these extracts of circulars, notes on clauses and Memo explaining objects and reasons, it is evident that items enumerated in definition clause are all those which are widely-held companies. But as they were not finding inclusion in definition, need was felt to incorporate them specifically. Therefore there is no force in submission of assessee that some companies which were not of nature of widely held companies are also included. In any case even if that were so, it does not help in importing company in definition if that does not satisfy requirements of company enumerated therein. 40. In view of above, it is held that assessee company is not company in which public are substantially interested. 41. In result, appeal on this point is to be dismissed. *** TATA SONS LTD. v. DEPUTY COMMISSIONER OF INCOME TAX