JUDGMENT

PATHAK, J. :— These appeals by certificate granted by the Delhi High Court are directed against a common judgment of that High Court disposing of two income-tax references relating to the assessment years 1956-57 and 1957-58 on the question whether the assessees dividend income from a Pakistan company was deductible against its business loss in India.

2. The assessee is a public limited company carrying on the business of manufacturing and selling sugar. During the relevant period it also held some shares in the Premier Sugar Mills & Distillery Co. Ltd., Mardan, West Pakistan. The Pakistan company also carried on the business of manufacturing and selling sugar. In the previous year relevant to the assessment year 1956-57 the assessee earned a dividend income of Rs. 2,30,832/- from its holdings in the, Pakistan company. It sustained a loss of Rs. 20,30,006/- from the business in India. Likewise, in the previous year relevant to the assessment year 1957-58 the assessee received a dividend income of Rs. 3,30,868/- from the holdings in the Pakistan company, but sustained a loss of Rs. 9,11,728/- from the business in India. The assessee claimed that the entire loss sustained by