1981 PLP 93 (PTD)

(b) The goods would be contained in such containers and in such manner as the principal would determine. (c) The principal would determine the price at which tire goods would be sold. (d) 'The principal could withdraw any product or products wholly or partially from the scope of the agreement. (e) The principal retained the right to inspect and audit the books of the agent, (f) The goods would be sold in the names, labels and trade marks in their original package as supplied by the principal. Mr. Sen finally submitted that it has been found by the Tribunal as a fact that the premises at which the goods of the assessee were sold in India was a place of business of the assessee and such finding being unchallenged it was not open to the assessee to impugn the same indirectly on the question as framed. In the support of the respective contentions of the parties a number of decisions were cited at the Bar which can be classified under three broad categories. The cases in the first category relate to service of summons and/or process preceding legal action on foreign companies or corporations the ques tion involved being under what circumstances such companies or corporations would be held or deemed to reside in a country for the purpose of such service. The second category of cases deals with the problem as to when a foreign Company can be said to exercise trade and carry on business so as to be liable to pay income‑tax in the country where such trade is exercised or business is carried on. In the third category some cases deciding under which circum stances a principal Company and its subsidiary can be said to be identified as one. The decisions cited are dealt with in their respective categories chrono logically as hereafter. (a) Saccharin Corporation Ltd. v. Chemische Fabrik Yon Heyden Akti engesellschaft (1911) 2 K B 516 (CA).‑The facts in this case were that the defendants, a German Company, had appointed a sole agent in England. The agent rented an office in and obtained orders from England for the defendant's goods and in some cases entered into contracts in the defendant's name for sale of such goods without the prior approval of the defendant. In some cases, orders were executed by delivering such goods from warehouses in London or from stock kept with the‑agent and, in the latter cases, payments were received by the agent. The agent received commission on the orders obtained. In the office of the agent signboards were displayed, describing the agent as the sole agent of the defendant. Contracts were executed in printed forms where both the names of the defendant and the agent were shown and were signed by the agent on behalf of the defendant. The agent was also acting as an agent of another German firm. On such facts, it was held that the defendant was carrying on business at the agent's office so as to be a resident within the jurisdiction of the English Courts and a writ served on the agent was held to be duly served on the defendant. The learned Judges of the Court of Appeal observed, inter alia, as follows :‑‑ " Vaughan Williams L. J.‑‑‑I have no doubt myself that a foreign cor poration can carry on business at a place in this country within the meaning of the rule, if, although the co. , ‑ration is not the lessee of the place, it is in any sense its own place of business. Two persons can carry on separate businesses in one house, or even in one room, and if one of those two businesses is the business of a foreign corporation, the fact that another business was carried on in the same place would not make it possible to say that the foreign corporation was not carrying on its business there in a place of its own." Farwell L. J.‑It appears that the whole operation of selling the defen dants' goods in tj s country is carried out at the offices rented by their agent ..These facts are in my opinion sufficient to prove that the defendants do carry on their business in England. That the foreign corporation must have a fixed place of business in this country is quite clear, but the particular tenure on which it occupies that fixed place is quite immaterial." (b) Okura R Co. Ltd. v. Forshacka Jernuerks Aktlebolog (1914) I K B 715 (CA).‑‑ In this case the defendant, a corporation incorporated in Sweden, employed a firm having an office at London as its sole agent. The said firm also acted as agents for other firms and carried on business on their account. The sole agent bad no general authority to enter into contract on behalf of the defendant but they obtained orders and submitted them to the defendant for approval. After the defendant, accepted the orders, the sole agent signed the contracts with the purchaser as agents of the defendant. Goods were shipped direct from Sweden to the purchaser. The sole agent in some cases received payment in London from the purchasers which were remitted to the defendant after deduction of agreed commission. On such facts, it was held that the defendants were not carrying on their business at the agent's office at London so as to be a resident within the jurisdiction of the English Courts and the service of a writ of summon at the office of the sole agent in London was not good service as against the defendant. The relevant observations of the Court of Appeal are as follows :‑ "Buckley L. J.‑(The London office) is really only an address from which business is from time to time offered to the foreign corporation; the question whether any particular business shall or shall not be done is determined by the foreign corporation in Sweden and not by any one in London. In my opinion, the defendants are not `here' by an alter ego who does business for them here, or who is competent to bind them in any way. They are not doing business here by a person but through a person. Phillimore, L J.‑ . . . . . a foreign corporation cannot be said to be `here' unless there are facts from which it can be inferred that, like an individual, it is residing here, and in the case of a trad ing corporation residence means the carrying on of its business." (c) Thames and Mersey Marine Insurance Co. v. Societadi Navigaaione a Vapore del Lloyd Austriaco (1914) 15 All E R (Rep.) 1104 (C A).‑The facts in this case were that a firm in England was appointed as a general agent by a foreign corporation and issued tickets, made contracts for the carriage of passengers and booked freight for goods in steamers belonging to the corporation for ten years at a defined place on commission basis. The firm also received a lump sum from the foreign corporation annually to cover rents and office expenses. The firm used a special note paper bearing the name of the foreign corporation. On such facts it was held that the foreign corporation was carrying on business in the United Kingdom. In his judgment, Buckley, L. J., observed as follows "The test in each case is to find the answer to the following questions: Does the agent in carrying on the foreign corporation's business make a contract for the foreign corporation, or does the agent, in carrying on the agent's own business sell a contract with the foreign corporation? In the former case the corporation is and in the latter it is not carrying on business at that place." (d) The Lalandia (1933) Probate 56=(1932) All E R (Rep.)

391. The facts in this case were that the defendants, a steamship corporation registered in Denmark, employed a firm in London as its agents for issue of passenger tickets, booking of freight and for other usual work of a ship's broker on customary commission and brokerage. The firm also acted as freight and passenger's agent for other foreign steamship companies. The names of all such steamship companies were displayed in the office window and also in the letter‑head of the firm. The defendants bad no other office or place of business nor any registered address in the United Kingdom nor any employee or servant resident in the country. It was held on such facts that the agents only "sold" and did not "make', contract on behalf of the defendants, who did their business "through" the agents and not "by them". The defendants did not reside within the jurisdiction of the English courts and a writ served on the agent's office at London was not validly served against the defendants. (e) Re: Tovarishestvo Manufacture Liudvig Rebenek (1944) 2 All E R 556 (Ch. D).‑In this case, a textile company incorporated in Russia used to obtain supplies of machinery and a raw materials from England for a considerable period during which one of its directors visited England every year to maintain contact with the suppliers, to place orders, to enter into contracts and generally to conduct the affairs of the company in the United Kingdom. On such visits the said director used to stay at a hotel in Manchester and used the same as a regular place of business of the company and all correspondence were conducted from the said hotel. The Company also had a banking account in England. In 1917, the Company was dissolved and ceased to exist in Russia. Some creditors sought to wind up the Company in England. In the course of realisation of the assets it was contended by a debtor that inas much as the Company did not have an established place of business within the jurisdiction of the English Courts, the liquidation proceedings were irregular and that the Company could not be wound up. It was held that it was sufficient for the purposes of the English Company law that a Company "should have a place" and not an "established place" of business in London. It was held further that the Court had jurisdiction to wind up the Company since it had carried on business in London through its director for‑ a substantial period and at a fixed place. Cohen, J., observed in his judgment as follows. "I think I should be defeating the object of the Legislature if I were not to hold that the Midland Hotel was, during the periods in question, the place of business in England of the Company and that they carried on business there-from. What was the object of the Legislature? Clearly, I think, to ensure that if a Company carried on business in this country, incurring, as it must do, liabilities to creditors in this country, its assets in this country should be available for its creditors even though it was dissolved in its country of origin or ceased to carry on business here. If this be the object, it would clearly be defeated if a Company could send members of its board of directors regularly to this country who carry on a substantial volume of business and then escape the consequences of so doing on the ground that it had not leased premises but had transacted its business from a hotel." (f) Banque des Marchands de Moscou tKoupetschesky) v. Kindersley (1952) 1 Ch. 112 = (1950) All E R 549 (C A).‑ In this case, in an action brought by the liquidators of a foreign Bank which had been dissolved in the country of its origin and where a subsequent winding‑up order was made in London, it was contended by the defendant in an action on behalf of the Bank that the Bank was non existent. It was held that the facts that the agent of the Bank had frequently visited various parts of England to conduct negotiations, later took steps to preserve the assets of the Bank and in fact had the Bank registered as carrying on business in England would show that there must have been a place or places where the business of the Bank had been carried on within the United Kingdom. The existence of assets of the bank and its debtors and creditors in England also showed that business in some sense had been conducted in England. (g) The World Harmony (1965) 2 All E R 139=(1965) 2 W L R 1275.‑In this case, following a collision between a Greek tanker and Yugoslavian tanker, fire broke out in both the vessels and the Yugoslavian tanker subsequently drifted into a Turkish passenger vessel. As a result, all the three vessels. became constructive total loss. The chatterer and sub‑chatterer of the Turkish vessel instituted a suit in England against the owner of the Greek tanker, a Liberian Company, and also an English Company which was responsible for the day‑to‑day management of the Greek tanker at the relevant time. The Liberian Company contended that they were not within the jurisdiction of the Court and that the address of the English Company was only its accommodation address. It was held on facts that the real place at which the business of the Liberian Company was carried on was the London office of the English Company. Howson, J., observed in his judgment as follows: "Let us look at the facts and not the technicalities of the situation. If the day‑to‑day business of operating and controlling this ship was not in fact carried out by the second defendants the (English Company) I know not who did it . . . . .. In my view, on all the facts of this particular case, the real place in which the business of the first defendants (the Liberian Company) was carried on was, as I have already said, at the second defendant's office in Park Street, London, and 1 find that the first defendant's place of business was in truth here." (h) Vogel v. R. and A. Kohnsramm Ltd. (1971) 3 W L R 537=(1971) 2 All E R 1428 (Q B).‑‑In this case, the applicant un successfully sought to execute in England a judgment of an Israeli Court passed against the English Company was not within the jurisdiction of the Israeli Court when the proceedings were instituted, the foreign judgment was not enforceable in England. The English Company's Representative in Israel only sought customers for the Company, transmitted and received correspondence, but had no authority to bind the Company This was not sufficient to make the Company a resident of Israel. The next category of English decisions cited are on the question as to when a foreign Corporation can be said to exercise a trade and/or carry on business within the United Kingdom so as to become liable to pay income tax under the English law. The said cases are dealt with chronologically hereafter. (a) Grainger & Son v Gough (1896) 3 T C 462 (H L).-The facts in this case were that a French merchant supplied large quantities of champagne from his cellars to consumers in the United Kingdom where he had no place of business. He also did not keep any stock of wine in the United Kingdom himself or through any agent. He had appointed an English firm as his sole representative in England who canvassed and obtained orders in the U. K. which they transmitted to their principal and received commission on all such orders if executed. The French principal reserved the right to reject any order forwarded. On acceptance of any order the produce was packed in France at the expense of the customer and forwarded direct to the customer at his cost and risk. The price was remitted direct to France or paid in cash or cheques or drafts in the name of the principal to the representatives in the United Kingdom. The cash was adjusted against the commission payable to the Representative and the cheques and drafts were forwarded to the principal who sent receipts direct to the customers. On such facts, it was held by the House of Lords, that the French merchant did not exercise any trade within the United Kingdom and was not liable to income‑tax in the U. K. The following observations from the judgments of the Law Lords were relied on: "Lord Herschell.‑I think there is a broad distinction between trading with a country, and carrying on a trade within the country . . If all that a merchant does in any particular country is to solicit orders, I do not think he can reasonably be said to exercise or carry on his trade in that country. What is done there is only ancillary to the exercise of his trade in the country where he buys or makes, stores, and sells his goods. Lord Watson.‑There is, in my opinion, a very broad distinction between the case of a foreigner making contracts in England with his English customers for the sale of his wines, either personally or through a Representative, and the case of his making similar contracts with these; customers in his own country." (b) Crookston Bros v. Furtado (1910) 5 T C 602.‑.The tads in this case were that a French Company, which had phosphate mines in Algeria, appointed agents in the United Kingdom who had authority to sell phosphates produced by the French Company without reference to the principal at or over minimum prices stipulated. 'The documents showed that the sales were, being made by the principal through the agents. The phosphates were shipped from Algeria and no stock was retained with the agents. The bills of lading were endorsed to the purchasers before the goods arrived in the country and the purchasers received the invoices and policies alongwith the bills against part payment of prices. The payments were made by crossed cheques in favour of either the principal or the agent and were sent by the agent to the principal with endorsements where necessary. The cheques were never deposited in any English Bank. On these facts it was held by the Court in Scotland that the foreign principal did not exercise any trade in the United Kingdom so as to‑be liable for income‑tax. (c) Gramophone and Typewriter Ltd. v. Stanley (1908) 2K B = 5T C 358 (CA): In this case an English Company carrying on business in the United Kingdom was the holder of all the shares in a German Company. It was held by the English Court of Appeal that fact alone did not make the business of the German Company the business of the English Company and did not create a relationship of principal and agent so as to render the English Company liable to income‑tax upon the full amount of the profits made by the German Company. The English Company was only liable to pay income‑tax upon such profits of the German Company as had been received in the United Kingdom. (d) Weiss, Biheller and Brooks Ltd. v. Farmer (1).‑The facts in this case were that an English Company was carrying on business, inter alia, of manufacture and sale of incandescent and other mantles. Under an agreement with a Dutch Company, which bad its head office in Holland, the English Company was appointed the sole sellers in the United Kingdom of gas mantles manufactured by the Dutch Company. Under the agreement the Dutch Company undertook to sell its products to the English Company at a price equivalent to the absolute net cost plus an expense percentage and the English Company undertook to sell the products in England at the best possible price. The English Company was entitled to 5 per cent thereof as commission for their expenses and the del credre where-after the profits were divided. The English Company kept a separate book recording sales open to the inspection of the Dutch Company at all times. The name of the Dutch Company was displayed at the premises of the English Company but did not appear on the latter's invoices. The transaction with the Dutch Company formed a small part of the entire business of the English Company. The English Court of Appeal held that the facts as above constituted evidence on which the Commissioner could find that the Dutch Company was carrying on business within the United Kingdom. The following observations of Lord Atkin in his judgment were relied on: "It appears to me that a foreign principal may well send his goods to this country to be sold as part of his trade for and on his behalf, and yet so conduct the business that the property in the goods for the purpose of the exercise of the trade passes to the agent." (e) F. L. Smidth & Company v. Greenwood (1922) 8 T C (381 (C A).‑The facts in this were that a Danish firm, resident in Denmark, manufactured for export machinery for cement, brick work, etc. They had an office in London, in charge of a qualified engineer employed by them, whose function was to advise prospective purchasers, receive enquiries, send to Denmark particulars of the requirements of the purchasers and samples of materials to be handled. He was also available for consultation at the erection of the machinery supplied. Contracts for supply of the machinery were finally negotiated and concluded in Denmark and the goods were delivered f.o.b. Copenhaigen. On these facts, it was held by the Court of Appeal in England that the Danish firm did not exercise a trade U. K. In his judgment Atkin, L. J., quoted with approval the observation of Lord Watson in Grainger & Son v. Gough (1921) 3 K B 583=8 T C 193, 204 (C A), as follows:‑ "There may, in my opinion, be transactions by or on behalf of a foreign merchant in this country so intimately connected with his business abroad that without them it could not be successfully carried on, which are nevertheless insufficient to constitute an exercise of his trade here ....:" (f ) Maclaine & Co. v. Ecott (1962) 10 T C 481 (H L).‑The facts were that a Java firm of general merchants and commission agents sold from time to time various produce of the East Indies in the United Kingdom through a London firm. The following types of transactions were had between the parties ; (i) The London firm sold in the United Kingdom produce which the Java firm had themselves undertaken to sell on commission on behalf of other planters. The London firm arranged for receiving and storing the goods, delivered them to the purchasers and received payment therefor. After deduction of expenses and commission the London firm accounted for the proceeds to the Java firm who in turn after deduction of their expenses and commission accounted to the original consignors. (ii) The London firm sold in London on commission goods purchased by the Java firm and consigned to the London firm. The London firm realised the proceeds and accounted for such money to the Java firm less their commission and expenses. (iii) The London firm sold on commission goods bought or to be bought by the Java firm, who consigned them direct to the purchasers both in the United Kingdom and in other countries c.i.f or f.o.b. Payment was effected by opening credit in a London Bank upon which the Java firm drew. The London firm always acted as the agent of the Java firm who controlled the price at which goods were sold. (iv) In 1915, the London firm sold to the British Government a quantity of sugar belonging to the Java firm which the London firm was authorised to sell at or above a stated price. The Government also placed a specific order with the London firm for a further amount of sugar. This order was telegraphed by the London firm to the Java firm which procured and delivered that quantity and also an extra quantity which was accepted by the Government, The London firm carried on negotiations and signed the contract subject to the approval of the Java firm as regards the payment clause, On these facts, it was held by the House: of Lords that the Java firm had exercised a trade in the U. K. in 311 the above transactions. Viscount Cave observed in this judgment as follows (E, p. 574‑75): " . In the case of a merchant's business, the primary object of which is to sell goods at a profit the trade is (speaking generally) exercised or carried on (I do not myself see much difference between the two expressions) at the place where the contracts are made: No doubt reference has sometimes been made to the place where payment is made for the goods sold or to the place where the goods are delivered, and it may be that in certain circumstances these are material considera tions; but the most important, and indeed the crucial question is, where are the contracts of sales made? " Firestone Tyre & Rubber Co. Ltd. v. Lewellin (1957) 37 T C 111(1957) 1 T R 338 (C A). In this case, an American Company organised world‑wide manufacture and sold branded tyres and owned the trade mark therein, A wholly‑owned subsidiary of the American Company was incorporated and registered in the United Kingdom which also manufactured branded tyres for the American Company. Under an agreement with the American Company, the English subsidiary agreed to fulfil orders for the European market obtained by the American Company, to forward its goods to the purchaser and to convey the instruction for payment of prices as laid down by the American Company. The English subsidiary was entitled to its cost price plus 5 per cent. Under separate, agreements with the distributors of its product in Europe, the American Company granted them the exclusive right to sell the branded tykes on stipulated terms and prices on their undertaking not to sell or distribute similar products and to keep on hand reasonable stock. The English subsidiary in practice received orders direct from the distributors of the American Company in Europe by post and fulfilled them without any further intervention of the American Company. It delivered the tyres F. A. S. at an English port. The price of the ivies sold in the United Kingdom by the English subsidiary was credited to the American Company after deducting costs plus 5 per cent. Particulars of all the transactions were supplied to the American Company by the English subsidiary. On these facts, it was held by the House of Lords (1958) 33 I T R 741 (H L) that the American Company was exercising a trade within the United kingdom by selling tyres to persons abroad and that the English subsidiary was assessable to British income‑tax as agents for the American Company. The observations of Lord Evershed M. R. approved by the House of Lords were as follows 37 TC111=311TR338: " . . . The fact that the English Company, when it sells particular goods, sells them as a principal to the customs, does not negative a proposition that the parent Company, from which in some sense or another the goods emanated, may not equally be carrying on or exercising a trade within the United Kingdom." Three, other decisions laying down the principles explaining the rela tionship between a principal Company and its subsidiary were cited at the bar and are noted hereafter. (a) Littlewoods Mail Order Stores v. I. A. C. (1973) 91 I T R 9 (S C).‑In this case, the assessee owned a leasehold interest in certain premises for 99 years of which a period of 88 years remained un-expired. Under an arrangement entered into with the owner of the property, a wholly‑owned subsidiary of the assessee became the reversioner under the leasehold and the original reversioner became the lessee of the subsidiary for 21 years and 10 days at a nominal rent. The assessee became the sub‑lessee of tire original reversioner for a period of 22 years at a higher rent than that it was paying originally but less than the commercial rent. The assessee claimed deduction of the enhanced rent in its income‑tax assessment. It was held that the extra rent paid was not money wholly and exclusively laid out for the purpose of the assessee's trade and, therefore, was not deductible. The extra rent was found to have been paid for the acquisition of a capital asset, viz., the reversion through a wholly‑owned subsidiary, a creation of the assessee, and. the assessee owned the real benefit of the fee-hold. (b) C. I. T. v. Sri Meenakshi Mills Ltd. (1967) 63 I T R 609 (S C).‑This decision was cited on behalf of the revenue for the following observations of the Supreme Court: " I is true that from the juristic point of view the Company is a legal personality entirely distinct from its members and the Company is capable of enjoying rights and being subjected to duties which are not the same as those enjoyed or borne by its members. But in certain exceptional cases the Court is entitled to lift the veil of corporate entity and to pay regard to the economic realities behind the legal facade. For example, the Court has power to disregard the corporate entity if it is used for tax evasion or to circumvent tax obligation." (c) C. I. T. v. Calcutta Discount Co. Ltd. (1973) 91 I T R 9 (S C).‑This decision was cited on behalf of the assessee for the following observations of the Supreme Court . "It is a well‑accepted principle of law that an assessee can so arrange its affairs as to minimise his tax burden. Hence, if the assessee in this case has arranged its affairs in such a manner as to reduce its tax liability by starting a subsidiary Company and transferring its shares to that subsidiary Company and thus foregoing part of its own profits and at the same time enabling its subsidiary to earn some profits, such a course is not impermissible under law." We may now refer to section 2(h) of the W. T. Act, 1957. At the material time, the said section provided as follows: "(h) Company means a Company as defined in section 3 of the Companies Act, 1956 (l of 1956), and includes‑ (f) a Company within the meaning of any law in force in the State of Jammu & Kashmir relating to companies; (ii) a Company incorporated outside India which has a place of business in India; . . . . ." The question in this reference is whether during the relevant years the assessee had a place of business in India within the meaning of the said section. Literally construed, for the application of the section it is not necessary to establish that a Company incorporated outside is carry ing on business in India. The section will apply if such a Company can be shown to have a place of business in India. In other words, if it can be established that there is a known address or a location where a foreign Company can be said to be available for business it will come within the four corners of the section. The presence of the representa tive or officers or employees authorised to represent the foreign Company at such address or location will confirm the conclusion that it is the place of business of the Company. Other evidence held to be relevant on this question as decided in the cases noted hereinbefore are, inter alia:‑ (a) Ownership by such a Company of a business premises in India or a lesser right as a leasehold interest or a licence in such premises. (b) Public display of the name of such Company in any business premises. (c) The use of stationery and other publicity material by such Company advertising its business address or similar advertisements in newspapers, telephone or business directories." If it can be ascertained by such evidence that a Company incorpo rated outside India is available for business or is open to business in India then the conclusion will follow that the Company has a place of business in India and it may not be necessary to determine further whether the Company is in fact carrying on business in India or not. On the other hand, other decisions cited and considered earlier appear to indicate that if it is established that such a Company is in fact carrying on business in India then it will be a matter of presumption that there is a place from where the business is being carried on. It may not be necessary to ascertain precisely or pinpoint the place where the business is being carried on. To determine whether a foreign Company is carrying on business in India or not, it has to be ascertained initially if transactions are being had or entered into in which the Company is a party. If the participation of the Company in the transactions is direst, e.g., where contracts are executed in its name and through its own officers and employees then there is no difficulty in holding that the Company itself is carrying on business in India. The proposition is not so clear where the Company is connected with the transactions indirectly, e.g. through a third party in India. In such a case, it has to be determined further whether the transactions are those of the third party on his own account or whether he is acting for or on behalf of the foreign Company as an agent. In the latter case again, the transactions would be those of the foreign Company and not those of the agent and it would be held that the foreign Company is carrying on the business. What are the types of transactions from which it can be inferred that business is being carried on in India. To come to the conclusion that business is being carried on in India the transactions must be found to have some connection with this country. Even if some connection is established it may not follow that business is being carried on in India, e.g. where goods are imported into India in the course of international trade, the supplier abroad may not be held to be carrying on a business in India. The tests enunciated in the cases discussed earlier to determine the situs where the business or trade is being carried on are as follows: "(a) Where the goods involved in the transactions are brought, stored or located in India, further dealings with the same in India may indicate that business is being carried on in India. (b) Where transactions are had pursuant to contracts entered into by and between parties in India, the business resulting from such transactions would be held to be carried on in India. (c) Where payments involved in the transactions are made and received in India it would be a relevant evidence to show that business is being carried on in India. (d) Similarly, where negotiations leading to the transactions and forming a crucial part of the transaction take place within India then again it would be a piece of evidence to hold that the business is being carried on in India." Coming to the facts of the instant case, it appears to us that if our enquiry is confined to the limited question whether the assessee has a place of business in India then it may not be conclusively shown that there is any known address or location in India where the assessee is available for business. The assessee does not own any premises nor any leasehold interest in any premises. It has also not been found that the assessee has any licence to carry on business activities from any particular address or location. There are no employees or officers of the assessee posted in any part of India at any particular address. If we now examine the other aspect of the question, viz., whether the assessee is carrying on a business in India, a different position emerges. It is found as a fact that the assessee, a foreign Company, has appointed ‑in Indian Company, a wholly‑owned subsidiary, as its sole agent in respect of goods manufactured by the assessee. The finished products brought to India are made over by the assessee to the Indian agent to be stored in India on the instructions of the assessee and such stocks are held by the Indian agent necessarily on behalf of the assessee. The products in India remain the property of the assessee and are sold in India at prices fixed by the assessee by the Indian agent which is authorized to pass title therein to the purchasers. This indicates that the Indian agent is authorised to sell the principal's goods by contracts made on behalf of its principal though the latter may be undisclosed. The accounts of the Indian Company of such transactions are available for scrutiny and inspection by the assessee. The products are sold in containers as specified by the assessee and in the names, labels and trade marks as supplied by the assessee. Thus, the goods of the assessee are being sold in India pursuant to contracts made by the agent of the assessee in India and the price for such sales is being received in India which is being ultimately collected by the assessee from its agent less the agent's costs, charges and remuneration. The above facts are similar to those in the case of Weiss, Biheller and Brooks Ltd. (1922) 8 T C 381 (C A), where the agent of the Dutch Company in England sold goods manufactured in Holland, the transaction being entered into in England and it was held that the Company exercised a trade in England. In the case of Maclaine & Co. (1926) 10 T C 481 (H L), also the goods of a foreign Company used to be sold in London by the London agent of the foreign firm and it was held that this constituted an exercise of a trade by the foreign firm in the United Kingdom. In the case of Firestone Tyre & Rubber Co. Ltd. (1957) 37 T C 111==33 I T R 741, the House of Lords went even further. In that case, the foreign Company concerned did not manufacture goods in the United Kingdom. Its subsidiary executed orders under its directions and goods manufactured by the subsidiary were sold In Europe through the distributors of the American Company in Europe on orders directly placed by the distributors to the subsidiary. Yet it was held that the American Company was exercising in a trade within the United Kingdom. Mr. Ginwalla, for the assessee, sought to distinguish the concepts of "exercise of trade" in the English income‑tax statutes and "carrying on a business". But we find from the observation of Viscount Cave in Machine & Co. (1957) 37 T C 111=(1958) 33 I T R 741, there is very little difference between the two expressions. From the aforesaid facts, the conclusion is inevitable and we hold the assessee is carrying on business in India. In view of` such finding it is not necessary for us to enquire and determine whether the Indian. Company, a wholly owned subsidiary of the assessee, is~ an alter ego of the assessee. The same conclusion would follow even if the assessee had appointed any other person, natural on juristic, as its agent in India under the same terms and condition as the Indian Company had been appointed. Once it is established that the assessee is carrying on a business the place where the business is being carried on is not difficult to locate. It is not necessary for the assessee either to own any premises or to hold any premises under a leasehold or licence. It must be held that the assessee is carrying on its business from the office of its agents. This is the law which was laid down in the case of Saccharin Corporation Ltd. (1911) 2 K B 516 (C A) and In re: Tovarishesive (1944) 2 All E R 556 (Ch. D), where it was held that the business could even be carried on from a hotel where the director of the foreign Company was put up temporarily. In the case of World Harmony (1965) 2 All E R 139 it was held that the foreign shipping Company was carrying on business in England at the accommodation address of its agents. For the above reasons, we hold that the assessee, a Company incor porated outside India, has a place of business in India and, therefore, is a Company within the meaning of section 2(h) of the W. T. Act, 1957. We answer the question referred in the affirmative and in favour of the revenue. The reference is disposed of accordingly. There will be no order as to costs. Question answered in the affirmative.