( 1 ) THIS reference under Section 256 (1) of the I. T. Act, 1961, arises out of the assessment proceedings for the assessment year 1968-69.

( 2 ) THE assessee is a private limited company. It carries on business of manufacture and sale, inter alia, of mild steel rods and bars used in reinforced concrete constructions or structures.

( 3 ) THE assessee and M/s. Tor-Isteg Steel Corporation of Luxembourg (hereinafter referred to as "the foreign company") entered into an agreement dated February 15, 1967, In this agreement, the assessee has been described as the "licensee" and the foreign company as "tor-Isteg".

( 4 ) IT reads, inter alia, as follows :" Article 1 Tor-Isteg grants to the licensee a full licence to use the following patents registered in Luxembourg relating to high tensile steel wires and/ or bars known as ' Ribbed Tor-steel' for reinforced concrete constructions : Article 2 During the period of this agreement: (a) Tor-Isteg and the licensee shall make available to each other all information in their respective possession relating to the working of and improvements to each of the patents. (b) Should the licensee or any of his employees, or any one else acting