Judgement

RAMASWAMI, J.: These appeals are brought by certificate from the judgment of the Calcutta High Court dated 28th September, 1964 in Income Tax Reference No. 18 of 1961.

2. The respondent (hereinafter called the assessee) is a private limited company incorporate in India and is a subsidiary of the Imperial Chemical Industries, London, which holds the entire share capital of the assessee. The business of the assessee consists mainly of acting as selling agents in India for a large variety of goods such as chemicals, dyes, explosives etc, manufactured or purchased by its London principals and sold in India. The Imperial Chemical Industries (Export) Glassgow (hereinafter referred to as the I. C. I. (Export) Ltd.) is another subsidiary of I. C. I. London which holds the entire share capital of I. C. I. (Export) Ltd. The I. C. I. (Export) Ltd. had appointed as their selling agents in India four companies, viz., (1) Gillanders Arbuthnot and Co. Ltd.. Calcutta, (2) Best and Co. Ltd., Madras, (3) Anglo-Thai Co. Ltd., Bombay, and (4) Shaw Wallace and Co. Ltd. With effect from 1st April, 1948, the I. C. I. (Export) Ltd. terminated the services of the aforesaid selling agents and appoin