JUDGMENT

Gill FJ:

This is a case stated by the Special Commissioners of Income Tax arising out of an appeal to them against the assessment of income tax by the respondent on the appellants' income for the years 1966 and 1967.

No evidence was adduced at the hearing before the special commissioners, as an agreed statement of facts was submitted to them, together with an agreement dated 11 November 1966 entitled "Reconstruction Agreement" entered into between the appellants and the RT Plantations Sdn. Bhd. A statement dated 21 September 1971 signed by the Chief Accountant of Plantations Agencies Sdn. Bhd. was also submitted to them as an agreed document.

Briefly stated, the facts of the case are that by an agreement dated 11 November 1966 the appellant company, which was incorporated in Hongkong with its registered office there, agreed to sell to the RT Plantations Sdn. Bhd, which was incorporated in the State's of Malaysia on 9 December 1965 and is a wholly owned subsidiary company of the appellants, the whole of the appellants' business as a going concern on the terms and conditions as set out in the said agreement. The appellants were the owners of five rubber estates known as BS