Judgement

SIKRI, J. : This appeal by certificate granted by the High Court of Judicature at Bombay under S. 66-A (2) of the Indian Income Tax Act, 1922, hereinafter referred to as the Act, is directed against its judgment in a reference made to it by the Income-tax Appellate Tribunal. The following two questions were referred:

(1) Whether on the facts and in the circumstances of the case, the surplus or difference arising as a result of devaluation in the process of converting dollar currency in regard to the sum of $ 36,123/02 repatriated to India was profit which was taxable in the hands of the assessee?

(2) Whether the said sum of $36,123/02 having been taxed in the relevant earlier years, the surplus or difference in dollar exchange account arising by reason of the repatriation thereof as a result of devaluation was rightly taken as profit taxable?

2. The relevant facts and circumstances, as stated in the Statement of the case, are as follows: The respondent, Tata Locomotive and Engineering Co. Ltd., hereinafter referred to as the assessee, is a limited company registered under the Indian companies Act (VII of 1913), and has its registered office at Bombay. The main business of the