( 1 ) THIS reference under Section 66 (1) of the Indian Income-tax Act, 1922, relates to the assessment year 1957-58 for which the relevant previous year ended on the 31st December, 1956,

( 2 ) THE assessce is an insurance company. On January 19, 1956, the management of its life insurance business vested in the Central Government under the provisions of the Life Insurance (Emergency Provisions) Ordinance, 1956 (hereinafter referred to as the " Ordinance " ). From the 19th January, 1956, to 31st August, 1956, a Custodian was in the management, of the said life insurance business under the provisions of the Ordinance and the corresponding section of the Life Insurance (Emergency Provisions) Act, 1956 (hereinafter stated as " the Act " ). The assessee was paid under Section 7 of the Act a compensation of Rs. 81,069 for the deprivation of the management of the said life insurance business for the aforesaid period when the Custodian was in the management of the said business. Thereafter, the life insurance business in India was nationalised by the Life Insurance Corporation Act, 1956, and under Section 7 of that Act the assets and liabilities of the insurers appertaining to the