Judgment

KAPUR, J. : This is an appeal by special leave against the judgment and order of the High Court of Calcutta and arises out of an Income-tax Reference which was decided against the assessee.

2. The appellant - Bengal Textiles Association - now in liquidation (which for the sake of convenience will hereinafter be termed the Association) was a statutory corporation incorporated under the Central Ordinance No. 32 of 1945 which was promulgated on September 8, 1945, "for the purpose of improving the procurement and wholesale distribution of" cotton piece goods in the Province of Bengal. The membership of the Association was restricted to dealers who were engaged in wholesale trade in piece goods. Its Board of Control consisted of nine members, all nominated by the Government. By an agreement between the Government of Bengal and the Association, certain privileges were conferred upon the Association. By one of the clauses the Government agreed to be responsible and pay every month to the Association the administrative expenses which had been incurred in the previous month including establishment charges, office advertising, salaries and wages not exceeding Rs. 6,00,000, per year le