Sankar Prasad Mttra, C.J. - (1.) This is a reference under Section 256(1) of the I.T. Act, 1961. The assessee is a company. Its entire share capital, it is stated, has been acquired by the Govt. of India with effect from April 19, 1960.
(2.) Before the acquisition, the assessee's business consisted mainly of repairing ships. The assessee has now extended its activities to the manufacture of rollers, cranes, river craft and sea-going vessels.
(3.) The assessee was all along following the mercantile system of accounting. At the end of each accounting year it had some work-in-progress in respect of the contracts it had undertaken.;