SABYASACHI MUKHARJI, J.

( 1 ) WE are concerned in this reference with the assessment year 1963-64, the relevant previous year being the one which ended on 31st March, 1963.

( 2 ) THE assessee is a company engaged in the manufacture of cotton textiles, rayon, yarn and also transparent paper. One of the grounds of appeal taken before the Tribunal from the order of the Income-tax Officer was in relation to taxability of a sum of Rs. 5,85,701 received by the asses-see under the export incentive scheme. In the profit and loss account for the year ended on 31st March, 1963, there was a credit of Rs. 6,00,826 which included the said sum of Rs. 5,85,701. The assessee had shown this sum in Section "f" of the return but claimed exemption from tax on the ground that the same was a casual receipt. The Income-tax Officer rejected the claim on inter alia the following grounds :"this receipt has been earned by the assessee in the course of its business as a textile manufacturer and is being accounted for by the company as a receipt year after year. The company is aware of and is regularly in expectation of this receipt on account of exports of its products and is accounting for it on the basis of exports made. The company is entitled to receive this sum as a matter of law and this receipt has occurred in the course of the assessee's trade and its capacity as a trader. "

( 3 ) THE Income-tax Officer, therefore, held that there was no basis for the contention that the amount was received in a casual nature and noticing that such a plea in respect of such a receipt had been rejected in the earlier years, included the amount in the computation of the total income. It may at this stage be relevant to refer to some of the provisions of the scheme under which the amount in question was received. There was a public notice which dealt with import of raw cotton against exports of cotton cloth and/or yarn. The said notice, inter alia, contained the basis upon which the mills whose cotton cloth or yarn were exported should be granted import licences for the import of cotton. It is not necessary to set out the details of the basis. But the said notice also contained the following note :"note :--In the event of Government reducing the normal quota of imported cotton of any mill or class of mills, it may provide that the mill or mills may retain for its/their own use such additional quantities out of the entitlement as it may determine from time to time. "

( 4 ) THE communication from the Textile Commissioner to the secretary of the appropriate Cotton Mills Federation stated about the scheme as follows:"5. For a smooth working of the arrangements within the industry, it is proposed that premium amounts to which exporting mills become eligible may be deposited with either the Indian Cotton Mills' Federation or the Southern India Mill Owners' Association, continuing the arrangement recently introduced. The mills getting import licences for cotton will deposit the amounts laid down by the Textile Commissioner, and the Indian Cotton Mills' Federation and the Southern India Mill Owners' Association will disburse the premium amounts as may he indicated by the Textile Commissioner. It is also left to the Textile Commissioner to issue further advice as necessary from time to time about disposal of any surplus. 6. In respect of the period July-December, 1959, the arrangements will be as follows : (i) The mills getting import licences will deposit a sum calculated at 20% of the value of cotton. The mills entitled to export incentives will receive them at the rates specified below :-- (a) The calculation of the incentive shall be related to a basic export performance of cloth and/or yarn as well as to the mill's exports of cloth and/or yarn to traditional or non-traditional markets, as the case may be. The basic performance per year shall be as under: for cloth: average of the export by value during the calendar years 1954, 1955 and 1956 put together or in excess o

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