Dave, J.—This is a reference by the Income-tax Appellate Tribunal, Bombay, under sec. 66(1) of the Indian Income-tax Act No. XI of 1922 (hereinafter referred to as the Act) for answering the following two questions :— (1) Whether on the facts and circumstances of the case, the action under sec. 34(1)(b) of the Act is valid in law ? (2) Whether the apportionment of the assessees total income between Part A and Part B States on the basis of purchase operations carried out in the taxable territories is valid in law ? 2. The facts which are not in dispute and which have given rise to the said questions, are that Messrs. Rajshri Pictures Ltd., Jaipur, hereinafter referred to as the assessee, is a private limited company, having its registered office at Jaipur. It carried on business as a film distributor and an exhibitor. For the assessment year 1951-52, the income of the assessee was assessed according to sec. 23(3) of the Act on the 30th May, 1952. During the said assessment proceedings, the assessee slated before the Income-tax Officer that profit on the sale of the pictures named "Sheesh Mahal" "N.A. Tarzan", "Parbat-ki-Rani" accrued, arose and was received at Jaipur as the contracts for sale were executed at Jaipur and the payments were also received at that place. As Jaipur was capital of Rajasthan and Rajasthan was a Part B State, the profits on the sale of the said pictures were subjected to the rates of tax as applicable to income arising in Part B State. Subsequently, the Income-tax Officer, with the previous approval of the Commissioner of the Income-tax, Delhi, issued a notice under sec. 34(1)(b) of the Act intimating the assessee that, according to his information, the assessee had earned considerable income in Part A State since the said films were purchased by the assessee in Part A State and part of his income accrued out of those purchases. The rates of tax payable in Part A States were higher as compared to the rates of income prevailing in Part B States. He, therefore, re-assessed the income of the assessee and it was held by him that 50% of the profits earned on the sale of the pictures should be deemed to have accrued on the purchase operations made in Part A State. He, therefore, re-assessed the income of the assessee and it was held by him that 50% of the profits earned on the sale of the pictures should be deemed to have accrued on the purchase operations made in Part A State. Accordingly, the allocation of the income arising in Part A and Part B States was altered and the assessment was revised on the said basis. It was observed by the Income-tax Officer in his revised order dated the 28th March, 1957 that the total profits earned by the assessee during the relevant year from the sale of the pictures amounted to Rs. 3,15,180/- and that since purchase operations created a major interest for earning profits in the assessees line of business the percentage of profit that could be deemed to have accrued in Part A State could be conveniently estimated at 50% of the profits earned by him out of the sale. It was accordingly held by him that a profit of Rs. 1,57,590/-should be deemed to have accrued in Part A State. Aggrieved by this order, the assessee filed an appeal before the Appellate Assistant Commissioner of Income-tax, Jaipur Range, and it was urged that proceedings initiated by the Income-tax Officer under sec. 34(1)(b) of the Act were bad in law as the said provisions (of sec. 34(1)(b) of the Act) were not attracted. It was also contended that the estimate about 50% profits, accruing in Part A States, made by the Income-tax Officer was arbitrary, excessive and capricious. The first contention was repelled but the second contention was partly allowed and the profits accruing in Part A State were reduced to 33-1/2 %. The assessee filed a second appeal before the Appellate Tribunal, Bombay and raised the same objections. The Appellate Tribunal also dismissed the first objection, but partly allowed the second objection and the estimate of the profits on account of purchase operations in Part A State was reduced to 12-1/2%. The assessee was not satisfied with the decision of the Appellate Tribunal and hence the said two questions have been formulated and referred by the Appellate Tribunal at his request. 3. The assessee was not satisfied with the decision of the Appellate Tribunal and hence the said two questions have been formulated and referred by the Appellate Tribunal at his request. 3. Regarding the first question, it is urged by learned counsel for the applicant (assessee) that when the Income-tax Officer passed his first order on the 30th of May, 1952, all the information necessary for purposes of assessment was in his possession, that no fresh information either of facts or of law, came to his knowledge thereafter, and so the provisions of sec. 34(1)(b) of the Act were not attracted and his fresh assessment dated the 28th March, 1957 was without any jurisdiction. 4. It is urged by learned counsel for the respondent in reply that the applicant is correct to the extent that no further factual information came to the knowledge of the Income-tax Officer after the first assessment dated 30th May, 1952 but after the said assessment was made, a decision of their Lordships of the Supreme Court in Anglo French Textile Co. Ltd. Vs. Commr. of Income-tax Madras(l) came to his notice and he realised that a part of the assessees income which had accrued or arisen in Part A State had escaped assessment at the rate of Income-tax prevailing in Part A State and so he was justified in serving a notice and proceeding to assess the assessee tender sec. 34(1)(b) of the Act. 5. Before proceeding to examine the said arguments, it would be proper to reproduce here the relevant provisions of sec. 34(1)(b):– "Notwithstanding that there has been no omission or failure as mentioned in cl. (a) on the part of the assessee, the Income-tax Officer has in consequence of information in his possession reason to believe that income, profits or gains chargeable to Income-tax have escaped assessment for any year, or have been under-assessed or assessed at a low rate, or have been made the subject of excessive relief Under this Act, or that excessive loss or depreciation allowance has been computed he may in cases falling under clause (a) at any time and in cases falling under cl. (b) at any time within four years of the end of that year, serve on the assessee, or, if the assessee is a company, on the principal officer thereof a notice containing all or any of the requirements which may be included in a notice under subsec. (2) of sec. 22 and may proceed to assess or reassess such income, profits or gains or recompute the loss or depreciation allowance; and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub-section." It would appear from the perusal of the said clause that even if there has been no omission or failure on the part of an assessee to make a return of his income as mentioned in clause (a), if the Income-tax Officer has reason to believe on the basis of information in his possession that income, profits or gains have escaped assessment for any year or even under-assessed or assessed at too low a rate,he may after following the formality of issuing a notice as provided in the sub-clause proceed to assess or re-assess the income, profit or gain of the assessee. At the same time,it may be pointed out that the use of the words "in consequence of information in his possession" used in clause (b) shows that the Income-tax Officer cannot take action under this clause capriciously or merely because he happens to change his opinion or to hold any opinion different from that of his predecessor but he should come in possession of some fresh information which was not already in his knowledge at the time of the earlier assessment. At one time there was a divergence of opinion whether the term information included information of facts only or it also included information about the law. It seems un-necessary to refer to earlier cases because he controversy has been set at rest by the pronouncement of their Lordships of the Supreme Court in Maharaj Kumar Kamal Singh Vs. The Commissioner of Income-tax, Bihar. In the said case, it was observed by their Lordships as follows :— "It is not disputed that, according to its strict literal meaning, the word "information" may include knowledge even about a stage of the law or a decision on a point of law. The Commissioner of Income-tax, Bihar. In the said case, it was observed by their Lordships as follows :— "It is not disputed that, according to its strict literal meaning, the word "information" may include knowledge even about a stage of the law or a decision on a point of law. The argument, however, is that the context requires that the word "information" should receive a narrower construction limiting it to facts or factual material as distinguished from information as to the true state of the law. In support of this argument Mr. Sastri referred to the marginal notes of secs. 19A and 20A as well as the provisions of sec. 22(3) and sec. 28 and urged that the information contemplated by these provisions is information as to facts or particulars and has no reference to the state of law or to any question of law: and so the said word in sec. 34(1)(b) should be construed to mean only factual information. We are not impressed by this argument. If the word information used in any other provision of the Act denotes information as to facts or particulars, that would not necessarily determine the meaning of the said word in sec. 34(1)(b). The denotation of the said word would naturally depend on the context of the particular provisions in which it is used. It is then contended that secs. 33B and 35 confer ample powers on the specified authorities to revise Income-tax Officers orders and to rectify mistakes respectively and so it would be legitimate to construe the word information in sec.34(1)(b) strictly and to confine it to information in regard to facts or particulars. This argument also is not valid. If the word information in its plain grammatical meaning includes information as to facts as well as information as to the state of the law, it would be unreasonable to limit it to information as to the facts on the extraneous consideration that some cases of assessment rates. which need to be revised or rectified on the ground of mistake of law may conceivably be covered by sec. 33B and 35. Besides, the application of these two sections is subject to the limitations prescribed by them; and so the fact that the said sections confer powers for revision or rectification would not be relevant and material in construing sec. 34 (l)(b). The explanation to sec. 33B and 35. Besides, the application of these two sections is subject to the limitations prescribed by them; and so the fact that the said sections confer powers for revision or rectification would not be relevant and material in construing sec. 34 (l)(b). The explanation to sec. 34 also does not assist the appellant. It is true that under the explanation production before the Income Tax Officer of account books or other evidence from which material facts could with due diligence have been discovered by the Income Tax Officer would not necessarily amount to disclosures within the meaning of the said section; but we do not see how this can have any bearing on the construction of cl. (b) in sec. 34(1). On the other hand, one of the cases specifically mentioned in sec. 34(1)(b) necessarily posutlates that the word information must have reference to information as to law. Where, in consequence of information in his possession, the Income Tax Officer has reason to believe that income has been assessed at too low a rate, he is empowered to revise the assessment and there can be no doubt that the belief of the Income Tax Officer that any given income has been assessed at too low a rate may in many cases be due to information about the true legal position in the matter of the relevant If the word information in reference to this class of cases must necessarily include information as to law, it is impossible to accept the argument that, in regard to the other cases falling under the same provision, the same word should have a narrower and a more limited meaning. We would accordingly hold that the word information in sec. 34(1)(b) includes information as to the true and correct state of the law and so would cover information as to relevant judicial decisions. If that be the true position, the argument that the Income Tax Officer was not justified in treating the Privy Council decision in question as information within sec. 34(1)(b) cannot be accepted." It is crystal clear from the said observation that the word information includes not only information as to facts or particulars but also information as to the true or correct state of law and so it also covers information as to relevant judicial decisions. 34(1)(b) cannot be accepted." It is crystal clear from the said observation that the word information includes not only information as to facts or particulars but also information as to the true or correct state of law and so it also covers information as to relevant judicial decisions. It is not in dispute between the parties that the decision of their Lordships in Anglo-French Tex. Go. Vs. I.T. Commr. Madras(l) was given long after the first assessment dated 30th May, 1952 and if it is held that the Income Tax Officer came to know the true and correct state of law from this decision, his action under sec. 34(l)(b) of the Act would be certainly justified. Learned counsel for the applicant has, however, contended that the said decisions of their Lordships did not deal with apportionment of assessees income between Part A and Part B States on the basis of purchase operations in Part A State and, therefore, the Income Tax Officer had wrongly referred to it, that he simply wanted to justify his wrongful action by referring to the said decision and so, the first point should be decided in the assessees favour. Learned counsel for the respondent disputes the correctness of this stand and he relies upon the said decision in support of his argument about the second question as well. It would thus appear that both the questions are closely inter-related and it would be proper to take up the discussion of the second point also henceforward and deal with both the questions together. 6. We have carefully gone through the judgment of their Lordships in Anglo-French Tex. Co. Vs. I. T. Commr. Madras(l). In that case, their Lordships had reframed the following two questions and remanded the case to High Court with direction to give its opinion:— "(1) Whether in view of the finding of fact, in this case that the entire profits were received in India and the Company is liable to tax under sec. 4(1)(a) of the Act, the provisions of sec. 42(1) have any relevancy. (2) Can the Income received in India be said to arise in India within the meaning of sec. 4 A (c)(b) of the Act ? If not, should only those profits determined under sec. 42(3) as attributable to the operations carried out in India be taken into account for applying the test laid down in sec. 42(1) have any relevancy. (2) Can the Income received in India be said to arise in India within the meaning of sec. 4 A (c)(b) of the Act ? If not, should only those profits determined under sec. 42(3) as attributable to the operations carried out in India be taken into account for applying the test laid down in sec. 4 A (c)(b)?" The High Court accordingly considered the said questions and answered question No. 1 in the negative and against the assessee. Regarding question No. 2, the opinion of the High Court was that the income received in British India could not be said to wholly arise in India within the meaning of sec. 4 A (c)(b) of the Act and that there should be allocation of the income between the various profit-producing operations of the business of the company in the light of principle contained in the earlier judgments of their Lordships of the Supreme Court in the Commissioner of Income Tax, Bombay vs. Ahmedbhai Umarbhai & Go. Bombay(3) and the Anglo French Textile Co. Ltd. vs. Commr. of Income Tax/Madras(4). Their Lordships of the Supreme Court also answered question No. 1 in the negative. Regarding question No. 2, it was observed that the income received in British India could not be said to wholly arise in India within the meaning of sec. 4-A(c)(b) of the Act and that there should be allocation of the income between the various business operations of the assessee company demarcating the income arising in the taxable territories in the particular year from the income arising without taxable territory in that year for the purposes of sec. 4-A (c)(b) of the Act. It may be pointed out that the case before their Lordships was about an assessee company which was incorporated in the United Kingdom having its registered office in London. It owned a spinning and weaving mill at Pondichery in French India where it manufactured yarn and cloth. Messrs. Best & Co. Ltd. Madras were appointed as agents of the assessee. The yarn and cloth manufactured in Pondichery were mostly sold in British India and partly outside British India. In the accounting years 1941 and 1942 all the contracts in respect of sales in British India were entered in) British India and their delivery was made and payments received in British India. Ltd. Madras were appointed as agents of the assessee. The yarn and cloth manufactured in Pondichery were mostly sold in British India and partly outside British India. In the accounting years 1941 and 1942 all the contracts in respect of sales in British India were entered in) British India and their delivery was made and payments received in British India. In regard to the sales out-side British India also, payments in respect of such sales were received in Madras through the said agents. It was held that in view of the finding that the entire profits were received in India and the company was liable to tax under sec. 4(l)(a), the provisions of sec. 42(1) had no relevancy. Their Lordships then proceeded to consider, that even if the provision of sec. 42(3) was not applicable, whether there was anything in the Act which prevented the application of the general application of apportionment of income profits or gains between those which were derived from business operations carried on within taxable territories and those derived from business operations carried on without taxable territories. Their Lordships then reproduced the following observations made in I.T. Commr. vs. Ahmedbhai Umarbhai & Co. (3) — "Whether the words "derive" and "produce" are or are not synonymous with the words "accrue" or "arise" it can be said without hesitation that the words "accrue" or "arise" though not defined in the Act are certainly synonymous and are used in the sense of "bringing in as a natural result". Strictly speaking, the word "accrue" is not synonymous with arise", the former connoting idea of growth or accumulation and the latter of the growth of accumulation with a tangible shape so as to be receivable. There is a distinction in the dictionary meaning of these words, but throughout the Act they seem to denote the same idea or ideas very similar and the difference only lies in this that one is more appropriate when applied to a particular case. In the case of a composite business i.e., in the case of a person who is carrying on a number of businesses, it is always difficult to decide as to the place of the accrual of profits and their apportionment inter se. In the case of a composite business i.e., in the case of a person who is carrying on a number of businesses, it is always difficult to decide as to the place of the accrual of profits and their apportionment inter se. For instance, where a person carries on manu facture, sale, export and import, it is not possible to say that the place where the profits accrue to him is the place of sale. The profits received relate firstly to his business as a manufacturer, secondly to his trading operations, and thirdly to his business of import and export. Profit or loss has to be apportioned between these businesses in a business like manner and according to well established principles of accountancy. In such cases it will be doing no violence to the meaning of the words "accrue" or "arise" if the profits attributable to the manufacturing business are said to arise or accrue at the place where the manufacture is being done and the profits which arise by reason of the sale are said to arise at the place where the sales are made and the profits in respect of the import and export business are said to arise at the place where the business is conducted. This apportionment of profits belween a number of businesses which are carried on by the same person at different places determines also the place of the accrual of profits." Referring to the above passage it was observed that it was sufficient to establish that the apportionment of income, profits or gains between those arising from business operations carried on in taxable territories and those arising from business operations carried on without the taxable territories was based not on the applicability of sec. 42(3) of the Act but on general principles of apportionment of income, profits or gains. It is urged by the learned counsel for the respondent that according to the said observations of their Lordships, the Income Tax Officer was fully justified in apportioning the income of the assessee arising from business carried on in Part A and Part B States. If looked at the mere surface, this argument of the learned counsel for the respondent may appear attractive but on a closer examination it would appear that the observations of their Lordships made in the above case would not apply to the facts and circumstances of the present case. If looked at the mere surface, this argument of the learned counsel for the respondent may appear attractive but on a closer examination it would appear that the observations of their Lordships made in the above case would not apply to the facts and circumstances of the present case. It may be pointed out that the case before their Lordships was that of-an assessee who was carrying on the business of manufacturing goods at one place and the sale of the manufactured goods at another place. It was, therefore, explained by their Lordships that where manufacturing operations of the activity of the assessee is carried on at one place and the sale at another place, the entire profits cannot be necessarily considered as arising from the sale, or at the place of sale, although they may be treated as having been received on the sale of the products. In such circumstances, the profits could be apportioned between the manufacturing and trading activities particularly when the assessee carried on the business of manufacturer and trader together. But in the present case it is not even hinted by the respondent that the assessee was carrying on any manufacturing activity in Part "A" State. He had simply purchased a few films in Part "A" State and, therefore, a serious question which arises for determination is whether any profits can be said to arise or accrue from a mere purchase of a certain commodity in Part "A" State. It is common ground between the parties, that the sale of the films was made in Part "B" State and the income was wholly received in Part "B" State. We would deal with this question very shortly. Before taking up this question, it may be further pointed out that in the said case their Lordships were dealing with apportionment of income accruing and arising within taxable territories and without taxable territories. In the present case, the question of taxable and non-taxable territory does not arise because part "B" State was as much taxable territory as Part "A" State. Therefore, the case before their Lordships was not on all fours with the present case. A caution has been given by their Lordships in several cases that their observations should be understood in the context of the facts and circumstances of the case in which they are made. Therefore, the case before their Lordships was not on all fours with the present case. A caution has been given by their Lordships in several cases that their observations should be understood in the context of the facts and circumstances of the case in which they are made. It would, therefore, be very hazardous to import the general principle of apportionment enunciated by their Lordships in the facts and circumstances of the said case to the facts and circumstances of the present case. In fact, it was conceded by learned counsel for the respondent at the time of arguments that the general principle of apportionment enunciated by their Lordships in the said case was in a different context. 7. We may now advert to the question whether profits could be deemed to accrue or arise merely because of the purchase of the films in Part "A" State. Learned counsel has not been able to point out any authority of their Lordships of the Supreme Court in which it might have been held that profits may be said to accrue or arise by mere purchase of a certain commodity at one place, nor has he been able to cite any case in which the principle of apportionment might have been extended to two different parts of the taxable territory. 8. On the other hand, it may be pointed out that in The Secretary, Board of Revenue, Income-tax, Madras Vs. Madras Export Co. Madras(5) a French Film had a branch in Madras whose sole duty was to buy leather goods at Madras and ship them to France. The question which arose for determination was whether the profits made by respondent in France with a branch or agent at Madras (which profits were received and retained in France) were liable to income-tax. It was held that the Madras Export Company was not liable to be taxed on the profits of the business carried on at Paris. In (Bhagat) Jiwandas Vs. Income-tax,Gommissioner,Lahore(6) a person residing and carrying on business in British India purchased goods in British India and sent them for sale to his shop in Kashmir which was outside British India. The question which was put to a Full Bench was whether he was liable to be assessed to income-tax in respect of any part of the profits derived from the sale of the goods; and, if so, what part ? The question which was put to a Full Bench was whether he was liable to be assessed to income-tax in respect of any part of the profits derived from the sale of the goods; and, if so, what part ? All the learned Judges were unanimously of the opinion that the mere purchase of goods in British India had too remote a connection to justify the conclusion that a part of the profits should be held to have accrued in this country. 9. Similarly, in S.V.P. Sudalaimani Nadar Vs. Commissioner of Income-tax, Madras(7) the Manager of a joint Hindu family exported goats and sheep from this country to Colombo and sold them there at a profit. It was held that profits derived from the sale in foreign country of animals purchased in British India were not assessable to income-tax when the profits had not been received or brought into British India. With respect, we agree with the above view and hold that profits to the assessee in the present case cannot be deemed to have accrued or arisen simply because the film in "A" State were purchased in "A" State. 10. We may make it clear at this place that the provisions of sec. 42(3) of the Act in terms do not apply to the present case because all the operations were carried out by the assessee in taxable territory. If the legislature had considered it necessary to extend the principle of the apportionment of income to different parts of taxable territories it could have inserted such a provision. In the absence of such a specific provision, we do not think it proper to import a fiction in favour of the respondent, and so interpret the fiscal statute as to cause hardship to the tax-payer by increasing the burden of tax upon him. In Jiwandas Vs. Income-tax, Gommr.(6) reference was made to the following observations of Lord Cairns in Partington Vs. Attorney General(8) — "As I understand the principle of all fiscal legislation, it is this : if the person sought to be taxed comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be. Attorney General(8) — "As I understand the principle of all fiscal legislation, it is this : if the person sought to be taxed comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind to be. On the other hand, if the Crown seeking to recover the tax, cannot bring the subject within the letter of the law, the subject is free however apparently within the spirit of the law the case might otherwise appear to be. In other words, it there be admissible, in any statute, what is called an equitable construction, certainly such a construction is not admissible in a taxing statute where you should simply adhere to the words of the statute." The general principle enunciated in the above passage still holds good and it would not be proper for us to burden the assessee by invoking an equitable construction in favour of the respondent. When the whole income of the assessee was received in Part "B" State which was a taxable territory and when the entire income was assessed and taxed at the rate prevailing there, there was no justification for the Income Tax Officer to revise his order later on and impose a higher tax on the part of the income at the rate prevailing in "A" State by invoking a general principle of apportionment between two parts of taxable territory. If it was the intention of the legislature to tax the assessee in this manner it could express its mind by laying down the law clearly. 11. Our answer to the second question, therefore, is that the apportionment of the assessees total income between Part "A" and Part "B" States on the basis of purchase operations carried out in the taxable territories was not valid in law. 12. As regards the first question, we have already pointed out above that an Income Tax Officer can proceed under sec. 34(l)(b) of the Act not only on the basis of a fresh information as to fact but also if he has information as to the true state or the meaning of the law derived freshly from external sources of authoritative character and that the word "information" would cover relevant judicial decision. 34(l)(b) of the Act not only on the basis of a fresh information as to fact but also if he has information as to the true state or the meaning of the law derived freshly from external sources of authoritative character and that the word "information" would cover relevant judicial decision. But in the facts and I circumstances of the present case, the decision on which reliance was placed by the Income-Tax Officer, was not applicable and, therefore, we find it difficult to hold that his action under sec. 34(1)(b) was valid in law. 13. Thus our answers to both the questions formulated above is in negative. 14. In the circumstances of the case, we leave the parties to bear their own costs.