Judgement

MAHAJAN J.: This is an appeal from the judgment of the High Court of Judicature at Madras dated 18-1-1950. delivered on a reference by the Income-tax Appellate Tribunal under S. 66 (11). Income-tax Act. whereby the High Court answered the two questions referred in the affirmative.

2. The appellant is a public limited company incorporated in the United Kingdom and owns a spinning and weaving mill located at Pondicherry in French India. The year of account of the appellant of the calendar year. In the year 1939, no sales of yarn or cloth manufactured by the Company were effected in British India, though in the previous year such sales were effected. All the purchases of cotton required for the mills were made in British India by Messrs. Best & Co. Ltd. Under an agreement between the appellant and Messrs. Best & Co. Ltd., Madras, dated 11-7-l939, Messrs. Best & Co. Ltd., were constituted the agents of the appellant for the purposes of its business in India. Messrs. Best & Co. Ltd., have under the terms of the agreement full powers in connection with the business of the appellant in the matter of purchasing stock, signing bills and other negotiable instruments and receipts and