SUHAS CHANDRA SEN, J.

( 1 ) THE Tribunal has referred the following question of law under Section 256 (1) of the Income-tax Act, 1961 " Whether, on the facts and in the circumstances of the case, the sum of Rs. 10 lakhs or any part thereof is taxable in the hands of the assessee or arisen in India ?"

( 2 ) THE assessment year involved is 1966-67, for which the relevant accounting period is the calendar year 1965. The assessee is a non-resident company which entered into three separate agreements dated March 12, 1964, for erecting a plant for the production of graphite and rendering services in connection therewith, Graphite India Ltd. (hereinafter described as "the Indian company ") was to pay to Messrs. Great Lakes Carbon Corporation Rs. 14,00,000 under the agreement. The facts found by the Tribunal as stated in the statement of case are as under : The assessee is a non-resident company. Its accounting year for the assessment year 1966-67 was the calendar year 1965. Proceedings under Section 147 were initiated in the above case by the Income-tax Officer by recording, inter alia, the following reasons :"this is a case of a non-resident which entered into three agreements dated Mar

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