Judgment

HIDAYATULLAH, J. :The Commissioner of Income-tax, Kerala and Coimbatore, has filed this appeal against the judgment and order of the High Court of Kerala dated October 31, 1958,* by which the High Court answered in favour of the respondent (Helen Rubber Industries, Ltd., Kottayam) the following question :

"Whether under the provisions of the Indian Income-tax Act the petitioner is entitled to carry forward the loss for a period of six years notwithstanding the act that during the period when the loss had occurred, the law applicable was the Travancore Income-tax Act ?"

The High Court has granted a certificate under S. 66A(2) of the Income-tax Act. Two questions were referred to the High Court in compliance with an earlier order of the High Court under S. 66 (2); but with the other question, we are not concerned in this appeal.

2. Messrs. Helen Rubber industries; Ltd. is a Company, which was incorporated in the former State of Travancore with its registered office at Kottayam. In the year 1941, the assessee Company granted a lease of the factory to certain persons for a period of 15 years. From that year, the rent and royalty received from the lessees were the only source of in