JUDGMENT

R.M. SAHAI, J.:- The question of law that arises for consideration in these appeals directed against order of the Bombay High Court, in an Income-tax reference relating to assessment year 1960-61, is if the assessee was entitled to claim partial exemption from payment of tax under Section 15C of Income-tax Act of 1922 on profits and gains derived from an industrial undertaking established in a building taken on lease used previously for other business.

2. M/s. Bachhraj Trading Corporation (in brief Corporation), incorporated on 29th September 1945, carried on business of import-export in various items. In 1957 it was granted licence for manufacturing tempo 400cc three wheeled transporters. It entered into an agreement with a foreign collaborator, who agreed to grant the licencee the know-how rights for the manufacture, in India of tempo commercial three wheeler vehicles, against payment of German marks. Accordingly the assessee company M/s. Bajaj Tempo Ltd., Bombay (in short Company) was, formed, for exploiting the manufacturing licence issued by the Government 32% of the share capital of which was subscribed by the foreign collaborators and remaining 68% share capital was i