Spencer, J.

1. The first question referred to us relates to the liability to income-tax of the profits of the Nedungadi Bank at Calicut which are asserted to have been earned in Cochin and Travancore. This Bank has these two branches outside the limits of British India. under Section 4(2) of the Income-tax Act the profits and gains of a business accruing or arising outside British India may be deemed to have accrued or arisen in British India, provided that they are received or brought into British India within three years or the end of the year in which they accrued. The balance sheet of this Bank for the year ending 31st December, 1923 shows Rs. 1,38,460 as net profits of the Bank. No separate account has been drawn up to show what the profits in its branches amounted to. There is only one account and no separate profit and loss account of the branches. This sum of Rs. 1,38,460 is shown in the appropriation account on the credit side, and the unappropriated balance of the previous year is added to it, and on the debit side figures are given which show how these profits were distributed, e. g., Rs. 71,000 were paid out in dividends; Rs. 20,000 as Managing Directors remunera