JUDGMENT

UNTWALIA J.:—This is an appeal by certificate and in it is involved an important question of law as to the interpretation of Article IV of the "Agreement for Avoidance of Double Taxation in India and Pakistan", hereinafter called the Agreement. The only case on the point decided by any Court in India so far brought to our notice is the decision of the Calcutta High Court, which is under appeal, reported in Commr. of Income-tax, West Bengal III v. Carew & Co. Ltd. (1973) 87 ITR 459.

2. Carew & Company Ltd., the respondent in this appeal, was resident in India having its Registered Office in Calcutta. The concerned assessment year is 1956-57. The corresponding previous year of the Company ended on June 30, 1955. During the relevant period the sources of income of the respondent company were from (a) business in India and interest earned in India on securities; (b) manufacturing business in Pakistan and (c) agricultural properties in Pakistan. For the relevant year the assessees Indian income as computed by the Income-tax Officer was Rs.2,01,329/- from business and Rupees 373/- from interest on securities. The total of the two items was Rs.2,01,702/-. The profit from assessees