GROVER, J.

1. The assessee firm dealt in raw wool and yarn apart from carrying on other business. In the account year ending March 31, 1955, relevant for the assessment year 1955-56 the export of wool to foreign countries could be done only under a licence to be issued by the Government. During the account year in question the assessee was granted a licence to export, which is popularly known as "export Quota", to the extent of 22,000 lbs. of wool. Similarly Messrs. Sri Kant Banwari Lal and Co. (hereinafter to be referred to as S.B. and Co.) had secured some quota to export wool. The assessee entered into a contract with Messrs. J. C. Gilbert Ltd., London, in April, 1954, agreeing to sell 37 bales of Indian wool at 53 d. per lb. The delivery was to be c.i.f. Liverpool. The assessee having exhausted its own export quota entered into an arrangement with S.B. and Co., by virtue of which it was the latter company which exported the bales from time to tome which had previously been sold to that company by the assessee in India and were repurchased by the assessee while they were in course of transit on board the ship and which was ultimately delivered to Messrs. J. C. Gilbert Lt