1. This case is of its own type. There is no precedent which governs it. It presents a fairly ticklish problem and has to be settled on first principles. The assessee is an Indian company with German collaboration. This company set up a factory for fabrication, manufacture and sale of hosiery needles. The West German collaborators are M/s. Gheodor Groz & Soehne and Ernst Beckert. The first accounting year of this company ended on 31st March, 1961. The present controversy relates to the assessment year 1962-63, the account year ending 31st March, 1962.

2. The relevant facts are that the assessee-company entered into an agreement with the collaborators. Under this agreement, the collaborators had to supply the machinery and were to get shares in the company. In the invoice dated 4th April, 1961, for machinery costing Rs. 9,45,545 there is no mention of any other material. But, along with the machinery "working-in-material" was supplied, but its value was not indicated in the invoice. An objection was raised by the Customs authorities and a the invoice. An objection was raised by the Customs authorities and a separate invoice was sent by the collaborators indication the value