Dipak Kumar Sen, J. - (1.) This is a consolidated reference under Section 256(1) of the I.T. Act, 1961, arising out of the income-tax assessment of Messrs. Khandelwal Bros. Pvt. Ltd., Calcutta, in the assessment year 1965-66. The question referred at the instance of the assessee is as follows: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the profit of Rs. 1,95,883 accrued to the assessee on account of devaluation of Indian rupee was business income ?"
(2.) The question referred at the instance of Commissioner of Income-tax, West Bengal-I, Calcutta, is as follows: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the profit of Rs. 1,95,883 on account of devaluation of Indian rupee did not accrue or arise to the assessee on 3rd November, 1964, when the assessee actually adjusted its account in respect of the sum due to the assessee from Messrs. K. A. Export Corporation, New York?"
(3.) The facts found and/or admitted in the proceedings are shortly as follow: The Indian rupee was devalued on the 16th September, 1949. At the end of the Diwali year 2006 corresponding to 21st October, 1949, i.e., the assessment year 1950-51, the assessee became and continued to be entitled to a sum of $1,08,540.20 from one K. A. Export Corporation, New York, by way of commission equivalent to Rs. 3,60,624-12-3 under the rate of exchange prevailing prior to the said devaluation. In the same year, a sum of $5,477.67 was adjusted on account of certain expenses incurred by the assessee during the period prior to devaluation. In the same year, one Khandelwal Refrigeration Corporation Ltd., an allied concern, was amalgamated with the assessee. An amount of $36,968'08 standing to the debit of the said Messrs. K. A. Export Corporation, New York, in the accounts of the said amalgamated company was adjusted in the accounts of the assessee after amalgamation in the same year. Thus, a sum of $1,40,030.61 became due to the assessee as aforesaid in the said accounting year from the said K. A. Export Corporation, New York.;