Judgment

HIDAYATULLAH, J. : This appeal, with special leave, has been filed against the judgment of the Nagpur High Court in a reference under S. 66(1) of the Indian Income-tax Act, 1922 by which the High Court answered the following question in the negative:

"Whether the proportionate profits on the goods of the value of Rs. 4,10,785 were received or were deemed to be received in British India, in the year of account, by or on behalf of the assessee Company within the meaning of S. 4(1)(a) of the Indian Income-tax Act, 1922."

2. The Commissioner of Income-tax, Madhya Pradesh and Bhopal is the appellant, and the Bhopal Textiles Ltd., Bhopal, is the respondent. For the assessment year 1944-45, the Company which was non-resident was treated as resident and ordinarily resident under S. 4(1)(c) of the Income-tax Act. In the year of account, it had supplied its manufactured articles either to the Government of India or its nominees at Agra, Allahabad and Delhi. Under the orders of the Government, the goods were sent direct to the persons nominated, who made the payment against the goods. The goods were all sent f.o.r. Bhopal, and the railway freight and other charges were to be borne by