Rajendra Nath Mittal, J.

1. This order will dispose of Income-tax References Nos. 23 and 24 of 1973.

2. The facts are that M/s. Patiala Biscuit Manufacturers Private Ltd. (now known as "Dalmia Biscuit Private Ltd.") (hereinafter referred to as "the Patiala Biscuit Company") derives income from the manufacture and sate of biscuits, confectionary and bread. The assessment year involved is 1967-68, for which the accounting period is the year ending December 31, 1966. A meeting of the board of directors took place on December 29, 1965, in which Mr. P.S. Narayanaswamy informed the board that several new biscuit factories had been established in the country and, as a result thereof, there was every likelihood of unhealthy competition between the manufacturers. He had discussed the matter with Mr. Ram Krishna Dalmia of New Delhi, who was agreeable to purchase the entire products of the company as its principal purchaser. He would dispose of the products at the rates fixed by the company from time to time. The work would be carried out by him as a sole trustee of the trust known as "Durga Devi Fund" which had been created by Shrimati Krishna Devi Dalmia, wife of Seth Jai Dayal Dalm