Judgment

RAMASWAMI, J. : This appeal is brought, by certificate, from the judgment of the High Court of Mysore, dated December 13, 1961 in Income-tax Reference Case No. 113 of 1959. The respondent (hereinafter referred to as the Bank ) is a public limited company carrying on business of banking at its head office in Mangalore and its branches in various places. It opened one branch in Karachi on November 15, 1946. After the partition of India in 1947 the currencies of the two dominions of India and Pakistan continued to be at par until there was a devaluation of the Indian Rupee on September 18, 1949. As Pakistan did not devalue her rupee, the old parity of the Pakistan and Indian Rupee ceased to exist. The exchange ratio between the two countries was not determined until February 27, 1951 On this date it was agreed that a hundred Pakistani Rupees were equivalent to a hundred and fortyfour Indian rupees. On the date of devaluation of the Indian Rupee the Karachi Branch of the Bank had with it a sum of Rs. 3,97,221 belonging, to its head office. Owing to the difficulties of the currency- situation it was impossible to remit the amount to the head office for quite a long tune. On Jul