Judgement

Appeal (No. 75 of 1946) from a judgment of the High Court (April 24/ 1945) on a reference under s. 28, sub-s. 1, of the Assam Agricultural Income-Tax Act, 1939, by the Assam Board of Agricultural Income-Tax.

The appellant society was incorporated in the United Kingdom, under the Industrial and Provident Societies Act, 1893, and its objects, briefly, were to carry on business as planters, growers, producers and merchants of tea, coffee, cocoa and other foreign and colonial products. At all times the society had two members only, the Co-Operative Wholesale Society, Ld., and the Scottish Co-Operative Wholesale Society, Ld. The two member societies advanced moneys to the appellant society to meet the cost of growing tea, which was grown on its own estate in Assam and then distributed to the two members. That transaction was regarded as a sale to the two members by the appellant society at the current market price of the tea, and the price was debited against the advances which had already been made by the member societies. The surplus over costs was dealt with by the appellant as to part payment of interest on the share capital, carrying forward another part for various speci