Judgment

KAPUR, J. : This is an appeal by special leave brought by the Commissioner of Income-tax against the judgment and order of the High Court of Bombay answering the question in favour of the assessee. The question referred by the Tribunal was:

"Whether on the facts and in the circumstances of the case the amount of Rs. 3,20,162 is an allowable deduction under Section 10(2)(xi) or 10(2) (xv) of the Income-tax Act?"

which was amended by the High Court as follows :

"Whether on the facts and in the circumstances of the case the amount of Rs. 3,20,162 is an allowable deduction" and was answered in the affirmative and against the appellant.

2. The facts of the case shortly stated are these : The respondent is a registered firm carrying on business as commission agents. It was treated as the agent of a non-resident principal Haji Mohomed Syed Al Barbari of Port Sudan (hereinafter referred to as the non resident principal ). It was carrying on the business of export of cloth and kariana (i.e., miscellaneous goods) to Aden, Saudi Arabia and Sudan. It used to supply goods from India to the non resident principal, who on his part, was sending cotton to the respondent and other merchants for