M.M.Dutt, J. - (1.) The applicant, Namdang Tea Co. Ltd., has challenged the propriety of the judgment of Sabyasachi Mukharji J., whereby the learned judge discharged the rule nisi issued on the application of the appellant under Article 226 of the Constitution.
(2.) The appellant is a non-resident sterling company which, at all material times, was carrying on business of growing, manufacturing and selling tea. The tea gardens and factories of the appellant were all in India. The accounts in India were recorded in rupee currency. The main accounts at the head office of the appellant in London were recorded in sterling. It is alleged that on the basis of these accounts in the head office of the appellant which was closed on 31st December, every year, that assessments of income-tax were made in India. A current account was maintained between the London head office and the Indian division in respect of the appellant's trading transactions.
(3.) On June 6, 1966, the Govt. of India devalued the rupee in terms of the pound sterling. It is alleged that as a result of the said devaluation of the rupee, the sterling value of the appellant's trading assets and liabilities in India as reflected in its London accounts suffered a reduction of 54,897 which represented loss on the appellant's net current assets, as distinguished from its capital or fixed assets. The appellant's head office profit and loss account for the concerned year ended on 31st December, 1966, accordingly, contained a debit entry of 54,897 in respect of the said loss. The aforesaid loss was treated by the appellant as an allowable charge in the computation of the appellant's income for the relative assessment year 1967-68.;