Ramaswami, J.

1. In this case the assesses is an incorporated Company owning two sugar factories at Lohat and at Sakri in the district of Darbhanga. The assessee is a member of the Indian Sugar Syndicate Ltd. (hereinafter referred to as the Syndicate) which was a trade organisation, the object of which was to promote the business interests of manufacturers of sugar and molasses. The Articles of Association of the Syndicate require that all the members should sell their entire output for each season to the Syndicate at a basic rate fixed by the Syndicate for this purpose. The members did not give actual delivery of the sugar to the Syndicate, but they were required to sell the stock of the sugar on behalf of the Syndicate and retain the price due to them by the Syndicate at the basic rate and pay the surplus to the Syndicate. Article 13 of the Articles of Association of the Syndicate is to the following effect:

"Notwithstanding anything to the contrary contained in these articles, the Board shall from time to time increase or decrease with retrospective effect the basic rates hereinbefore fixed so that the Syndicate will not at the end of the season earn a profit of more tha