SHREE KRISHNA AGENCY LTD. vs COMMISSIONER OF INCOME TAX CENTRAL, CALCUTTA

The Supreme Court held that Article 37 of the Articles of Association does not restrict the transferability of shares, thus the company can be considered one in which the public is substantially interested under Explanation (1) to Section 23A(9) of the Income-tax Act, 1922. The Court found that the mere existence of Article 37 does not affect the free transferability of shares, and there was no evidence of the Directors exercising their discretion to deny transfers. The High Court's ruling was overturned, affirming that the shares were freely transferable.