Judgment :- 1. This is a reference by the Income-tax Appellate Tribunal, Madras Bench, under S.66 (1) of the Indian Income-tax Act, 1922. The question referred is: "Whether on the facts and in the circumstances of the case, the Cochin Malleables (P) Ltd., was a company in which the public were substantially interested as contemplated by S.23A?" 2. The question has to be resolved in the light of explanation I to S.23A of the Indian Income-tax Act, 1922. The relevant portion of that explanation reads as follows: "For the purposes of this section, a company shall be deemed to be a company in which the public are substantially interested (a) if it is a company owned by the Government or in which not less than forty per cent of the shares are held by the Government;" 3. The assessee is not a company owned either by the Central or a State Government. The only question for determination is whether it can be considered to be a company in which not less than forty per cent, of the shares are held by the Government of Kerala. 4. The Statement of the Case says: The proportion of the shares held by the Government to the total paid up capital of the company worked out to (1) 44.8 per cent by monetary value and (2) 30.99 per cent by number." Which of the two percentages is the material percentage for deciding whether the assessee is a company in which the public are substantially interested? We take the view that it is the former & not the latter, and that as a result the question referred has to be answered in favour of the assessee and against the Department. 5. According to Halsbury a share is a right to a specified amount of the share capital of a company, carrying with it certain rights and liabilities while the company is a going concern and in its winding up (3rd Edition, Volume 6, Page 234). In Prabhudas v. Ramlal (3 Bombay High Court Reports 69 O. C.) Couch C. J. Said: "A share in a company signifies a definite portion of its capital, and a contract to sell a share is a contract to sell and transfer that right"; and in Borland's Trustee v. Steel Brothers and Go. Limited (19011 Ch. In Prabhudas v. Ramlal (3 Bombay High Court Reports 69 O. C.) Couch C. J. Said: "A share in a company signifies a definite portion of its capital, and a contract to sell a share is a contract to sell and transfer that right"; and in Borland's Trustee v. Steel Brothers and Go. Limited (19011 Ch. 279) Far-well J. said: "A share is the interest of a share-holder in the company measured by a sum of money, for the purpose of liability in the first place, and of interest in the second." 6. The expression "share" is defined in S.2 (46) of the Companies Act, 1956. The definition is: "'share' means share in the share capital of a company, and includes stock except where a distinction between stock and shares is expressed or implied;" 7. All the shares of a company need not be of an equal amount, nor need they be all of the same class. It must follow that the existence or otherwise of a substantial interest will have to be gauged with reference to the participation in the share capital of a company and not by the number of shares held irrespective of their value and character. The commentary of Sampath Iyengar is to the same effect. It says: "In 1955, S.23A was recast largely following the recommendations of the Mathai Committee. The definition of 'a company in which public was substantially interested' was enlarged so as to include a company owned by the Government or a company in which the Government held 40 per cent or more of the share capital." (5th Edition, Volume 3, Page 1281). 8. We entertain no doubt that the question referred has to be answered in the affirmative as indicated in Para.4 above. We do so; but without any order as to costs. 9. A copy of this judgment under the seal of the High Court and the signature of the Registrar will be forwarded to the Appellate Tribunal as required by sub-section (5) of S.66 of the Indian Income-tax Act, 1922.