CHAKRAVARTTI, C. J.

1. THIS reference involves a short but intriguing point which afforded an opportunity for arguments of some subtlety.

2. THE assessees, McGregor and Balfour Ltd., Calcutta, are a limited company, incorporated in the United Kingdom and having their registered office there. THE control and management is also not wholly situated in India. They however trade in this country as well and had to pay excess profits tax under the relevant Acts both in India and in England. In respect of the tax paid in this country, they availed themselves of the provisions of s. 12(1) of the EPT Act and in respect of the tax paid in the United Kingdom they availed themselves of the provisions of s. 12(2) and so deducted appropriate amounts in computing their profits and gains of the relevant years for the purposes of income-tax and super-tax. In the accounting year ended on the 31st Oct., 1946, relative to the asst. yr. 1947-48 they obtained in the United Kingdom a repayment of a sum of Rs. 2,31,009 out of the excess profits tax paid there under the English Act. That repayment was made to them under s. 28(1) of the Finance Act of 1941 (4 and 5 Geo. 6, c. 30). THE ITO included the