JUDGMENT

KHANNA, J.:— This judgment would dispose of two cross Civil Appeals Nos. 1491 and 1693 of 1971 which have been filed by special leave by the assessee, M/s. Tea Estate India (P) Ltd., and the Commissioner of Income-tax West Bengal respectively against the judgment of the Calcutta High Court answering the following question referred to it under Section 66 (1) of the Indian Income-tax Act, 1922 (hereinafter referred to as the Act) partly in favour of the assessee and partly in favour of the revenue:

"Whether on the facts and in the circumstances of the case, the balances in the undernoted accounts are includible in the accumulated profit within the meaning of Section 2 (6-A) (c) and if so the what extent?

Dibru Darang Tea Co. Ltd. Taikrong Tea Co. Ltd.

Land A/c. Rs. 19,30,374/- Rs. 10,11,216/-

Profit and Loss Account Rs. 16,69,285/- Rs. 18,73,125/-

General Reserves and liabilities for taxation Rs. 3,50,799/- Rs. 2,243/-

Reserve created on writing up the value of the assets of the tea estates Rs. 15,69,828/- Rs. 58,772/-"

2. The matter relates to the assessment year 1956-57, the corresponding accounting year for which ended on June 30,1955. The assessee company held 52,350 share