Dipak Kumar Sen, J. - (1.) The facts found and/or admitted as on record are, inter alia, that Assam Oil Co. Ltd., the assessee, is a non-resident sterling company which had been carrying on business in prospecting and extracting petroleum from various fields in the north-eastern region of India. The assessee was also running a refinery at Digboi in Assam. The assessee was granted prospecting licences by the Government of India for prospecting in areas other than those initially allotted to it including Naharkatia, Hugrijan and Moran in Assam on condition that, ultimately, the entire new area would be transferred to a resident rupee company to be incorporated for prospecting and extraction of petroleum. Between 1954 and 1958, the assessee continued with field work in prospecting in the extended areas.
(2.) The rupee company known as Oil India Ltd. was incorporated under the Companies Act, 1956, on February 18, 1959. It was arranged that the expenses incurred by the assessee prior to the registration of the rupee company were to be met by the latter and that the assets and properties of the assessee utilised in prospecting and field work would also be taken over by Oil India Ltd. at an agreed consideration to be settled between the parties.
(3.) From its incorporation in 1959 till the end of December, 1961, Oil India Ltd. had no employees of its own and the operations in different areas allotted to it were carried out by the employees of the assessee.;