( 1 ) THE Income-tax Appellate Tribunal, Delhi has referred two questions for our decision in this matter which arise out of the assessment to income tax of M/s. Gedore Tools (India) Pvt. Ltd. for the assessment year 1966-67, the corresponding previous year for which was the year ended on 30-6-1965.

( 2 ) THE contnoversy in the reference raises a question of the interpretation of Rule 19 of the Income-tax Rules, 1962. It may be convenient befare setting out the facts to refer to the statutory provisions. Section 84 of the Income-tax Act, 1961 as it stood at the relevant time and in so far as it is relevant for our present purposes provided that income tax was not payable by an assessee on so much of the profits and gains derived from any industrial undertaking to which the section applied as did not exceed 6 per cent per annum on the capital employed in such undertaking computed in the prescribed manner. The computation of the capital for the purposes of this section was provided for by Rule 19 of the Income-tax Rules. 1962. This rule has. six sub-clauses but for our purposes it is sufficient if the first subclause is set out. Rule 19 (1) at the relevant time re