1. In this case the assessee is a private limited Company carrying on business in the manufacture of sugar and, molasses out of Sugarcane. The assessment year is 1951-52 and the Accounting year corresponds to the period from 1-10-1949 to 30-9-1950.

2. The purchase of Sugarcane on behalf of the assessee was governed by the Bihar Sugar Factories Control Act, 1937, (Bihar Act 7 of 1937) and the Bihar Sugar Factories Control Rules 1938. In accordance with those rules the assessee company was required to set up purchasing centres for sugarcane and to locate weigh bridges at the purchasing centres. The assesses company was also required to purchase sugarcane at these centres and payment for the cane to the Sugar cane cultivators was required to be made within a fortnight of the date of weighment. The assessee company was required to exhibit on the notice board at each weighment centre the dates and hours at which payments would be made from time to time.

In compliance with the statutory rules the assessee company announced that payments to the sugarcane cultivators would be made at Dooria which was one of the purchasing centres on Tuesdays and Sundays of each week. On 16-4-1950,