Judgment

GROVER, J.:- This is an appeal by special leave from a judgment of the Bombay High Court answering the following question referred to it by the Income-tax Appellate Tribunal in the affirmative and against the assessee :

"Whether on the facts and circumstances of the case the receipt of Rs. 1,87,000 in the hands of the assessee is a revenue receipt and liable to income-tax ?"

The assessee used to carry on his business under the name and style of Milkhiram Bros. He was being assessed from the year 1945-46 onwards. On October 31, 1946 he secured a contract for the purchase of approximately 1,28,499 parachutes from Tata Aircraft Ltd. The parachutes belonged to the Government of India and the Tata Aircraft Ltd., was acting as the agent of the Government. The agreed purchase price of the parachutes was approximately 93 1/2 lakhs. The contract was entered into by means of letters. The assessee addressed a letter dated October 29,1946 to Tata Aircraft Ltd. containing an offer. Tata Aircraft Ltd. sent a reply dated November 1, 1946 confirming the sale on the terms and conditions given in that letter. The assessee had to make a deposit by way of earnest money of a sum of Rs. 10 lakhs