Dipak Kumar Sen, J. - (1.) The facts found and on record in the above references are that M/s. Macneill & Barry Ltd., the assessee, was at the material time the agent of Rivers Steam Navigation Co. Ltd., a company incorporated in the United Kingdom which carried on business of inland navigation in and around India. At the material time, the assessee was a partly owned subsidiary of Inchcape & Co. Ltd., a company also incorporated in the United Kingdom. The majority of the shares of the Rivers Steam Navigation Co. Ltd. was held by the Rivers Steam Navigation Co. (Holdings) Ltd. which was also a company incorporated in the United Kingdom.
(2.) Rivers Steam Navigation Co. Ltd. had been incurring loss over successive years and fell into financial difficulties. The assessee had been incurring expenditure on behalf of Rivers Steam Navigation Co. Ltd. The assessee as the agent of the Rivers Steam Navigation Co. Ltd. was also entitled to a commission. On account of the aforesaid, on December 31, 1964, a sum of Rs. 33,49,366 became payable by the Rivers Steam Navigation Co. Ltd. to the assessee and remained outstanding.
(3.) On February 6, 1965, an agreement, in writing, was entered into amongst the Government of India, the Inchcape & Co. Ltd., Rivers Steam Navigation Co. (Holdings) Ltd., the assessee, and two other companies, namely, the Ganges Transport and Trading Company Ltd., an Indian company which was a wholly owned subsidiary of Inchcape & Company Ltd. and India General Navigation and Railway Company Ltd., another company incorporated in the United Kingdom.;