( 1 ) THESE two petitions involve interpretation of Section 206c (vi) of the Indian Income Tax Act.

( 2 ) FACTS are as under: the petitioner-Mysore Sales International Ltd. , is a Karnataka Government Undertaking and is engaged in manufacture of arrack. The petitioner is covered by the provisions of the Income Tax Act (for short the Act ). The petitioner entered the arrack trade from 1. 7. 1993 in terms of the excise laws. Prior to 1993, there were several private bottling units in the State of Karnataka and they were manufacturing and selling arrack. Auctions were conducted periodically for the purpose of conferring lease of right of retail vend of arrack. It was conducted with reference to designed areas. The successful bidders are entitled to procure arrack from the bottling units and then sell it in retail trade within their allotted area. The arrack trade is controlled by the State Government. The Karnataka Excise Act has framed several rules for appropriate enforcement of excise laws. In the year 1993, the Government discontinued private bottling units from engaging in the manufacture or bottling units from engaging in the manufacturing or bottling of arrack and instead decid

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