Judgment

SUBBA RAO, J. : This appeal by special leave preferred against the judgment of the High Court of Kerala at Ernakulam raises the question of the interpretation of S. 7(1) of the Indian Income-tax Act, 1922 (Act No. XI of 1922), hereinafter called the Act.

2. The respondent, L. W. Russet, is an employee of the English and Scottish Joint Cooperative Wholesale Society Ltd., Kozhikode, hereinafter called the Society, which was incorporated in England. The Society established a superannuation scheme for the benefit of the male European members of the Society s staff employed in India, Ceylon and Africa by means of deferred annuities. The terms of such benefits were incorporated in a trust deed dated July 27, 1934. Every European employee of the Society shall become a member of that scheme as a condition of employment. Under the terms of the scheme the trustee has to effect a policy of insurance for the purpose of ensuring an annuity to every member of the Society on his attaining the age of superannuation or on the happening of a specified contingency. The Society contributes 1/3 of the premium payable by such employee. During the year 1956-57 the Society contributed Rs. 3,333/- t