Judgment

RAMASWAMI, J. : This appeal is brought by special leave against the Judgment of the Madras High Court dated the 13th September, 1961 in T. C. 162 of 1958.

2. The Madurai Mills Co., Ltd. (herein after called the respondent) is a dealer in yarn, purchasing raw material like cotton staple-fibre, etc., manufacturing them into yarn and selling the yarn. In the assessment year 1950-51, the respondent showed a return of Rs. 15,27,61,883-8-4 before the Deputy Commerical Tax Officer, Madurai who after scrutiny of the account books determined the net turnover at Rs. 15,44,09,109-3-11. The respondent preferred an appeal before the Commercial Tax Officer, Madurai South. It was contended on behalf of the respondent that a sum of Rs. 1,44,294-14-4 was wrongly included by the first assessing authority in the purchase value of cotton purchased by it for production of yarn as that amount only represented the commission paid by it to Comorin Investment Trading Company Limited for the purchase. It was also contended that another sum of Rupees 81,546-0-l which represented sale proceeds realised by selling empty drums etc. was not realisation in the course of its business. The Commercial Tax Off