COMMISSIONER OF INCOME-TAX, WEST BENGAL vs EAST COAST COMMERCIAL CO. LTD.

The Supreme Court held that under Section 23A of the Income Tax Act, 1922, the determination of whether a company is one in which the public is not substantially interested requires an assessment of whether shareholders are acting in concert as a controlling block. The Court found that the Tribunal and High Court erred by not considering the possibility of family members acting together despite holding a majority of shares. The appeal was allowed, and the case was remanded for a proper inquiry into the control exercised by the family members over the company's affairs.