Judgment

SHAH, C.J.I. : - Burlop Dealers, Ltd.- hereinafter referred to as the assessee is a limited company. For the assessment year 1949-50 the assessee submitted a profit and loss account disclosing in the relevant year of account Rs. 1,75,875/- as profit in a joint venture from H. Manory Ltd., and claimed that Rs. 87,937/- being half the profit earned from H.Manory Ltd. was paid to Ratiram Tansukhrai under a partnership agreement. The assessee stated that on June 5, 1948, it had entered into an agreement with H. Manory Ltd., to do business in plywood chests and in consideration of financing the business the assessee was to receive 50% of the profits of the business. The assessee also claimed that it had entered into an agreement on October 7, 1948, with Ratiram Tansukhrai for financing the transactions of H. Manory Ltd. in the joint venture, and had agreed to pay to Ratiram Tansukhrai 50% of the profit earned by it from the business with H. Manory Ltd.

2. The Income-tax Officer accepted the return filed by the assessee and included in computing the total income for the assessment year 1949-50 Rs. 87,937/- only as the profit earned on the joint venture with H. Manory Ltd. In the