Varadachariar, J.

1. The question referred to this Court for decision is whether, on the facts set out in the Commissioners statement, any part of the income derived by the assessee from the produce of his coffee estates in Mysore is exempt from taxation under the 2nd proviso to Clause (2) of Section 4 of the Indian Income Tax Act.

2. The assessee who owns coffee plantations in the Mysore State is a resident of British India (Mangalore) ; and the case states that while he maintains an office in the Mysore territory to supervise the cultivation work there, the labour required for the cultivation is recruited in Mangalore, materials required for the estate like manure, tools, spray materials, crop-bags, etc., are purchased at Mangalore, the harvested crops are brought to Mangalore in their raw state to be dried and cleaned there in the factories of Pierce Leslie & Co., and the coffee seeds thus prepared for the market are sold there, by Pierce Leslie & Co., the selling agents of the assessee. As the sale proceeds are received and retained at Mangalore and a separate staff is maintained by the assessee at Mangalore to attend to the above operations, the Commissioner was of opini