Judgment

DAS, J. :

This appeal arises out of proceedings for the assessment to income-tax of the respondent Messrs. Ogale Glass Works Ltd., (hereinafter referred to as "the assessee") for the five assessment years 1941-42 to 1945-46.

2. The assessee is a Limited Liability Company incorporated and carrying on business in Aundh which in those days was an India State outside British India. It was accordingly a non-resident Company for the purposes of the Indian Income Tax Act.

3. The assessee manufactures lanterns and other glasswares at its Works in Aundh State. In the relevant accounting years the assessee sucured some contracts for the supply of lanterns and other glasswares to the Government of India. The price of the goods supplied under the contracts were paid by cheques drawn on the Reserve Bank of India, Bombay. The cheques used to be received by the assessee in Aundh and cashed through its bank at Bombay as hereinafter stated.

4. The assessee being a non-resident Company its liability to British Indian Income-tax depended upon its receipt of income within British India. In the course of proceedings for the assessment of the assessee to income-tax for the five years mentioned abov