Summarize the following court judgment. Appeal No. 179 of 1954. Appeal from the judgment and order dated March 12	 1953	 of the Bombay High Court in Income tax Reference No. 43 of 1952. C. K. Daphtary	 Solicitor General of India	 G. N. Joshi and B. H. Dhebar	 for the appellant. N. A. Palkhivala	 D. H. Dwarkadas	 J. B. Dadachanji	 section N. Andley and Rameshwar Nath	 for the respondent. May 15. The Judgment of the Court was delivered by section K. DAS J. This is an appeal on a certificate granted by the High Court of Judicature at Bombay under sub section (2) of section 66A of the Indian Income tax Act (hereinafter referred to as the Act). The appellant is the Commissioner of Income tax	 Bombay	 and the respondent is the Provident Investment Co.	 Ltd.	 Bombay	 hereinafter referred to as the assesses company. The short question which falls for consideration in this appeal is whether a particular transaction	 details 1143 whereof we shall presently state	 entered into by the assessee company in 1946 resulted in capital gains within the meaning of section 12B of the Act. The question which was referred to the High Court under section 66(1) of the Act was this: " Whether the assessee company made a capital gain amounting to Rs. 81	81	900 within the meaning of section 12B of the Indian Income tax Act?" The High Court answered the question in the negative. The appellant being dissatisfied with the judgment and order of the High Court asked for and obtained a certificate from the said High Court that the case is a fit one for appeal to the Supreme Court. The material facts may be very shortly stated. The assessee company is a private limited company	 the shares of which were held by the then Maharaja Scindia of Gwalior and his nominees. At the material time	 the assessee company was the managing agent of Madhowji Dharamsi Manufacturing Co.	 Ltd.	 hereinafter briefly referred to as the Dharamsi Company	 and Sir Shapurji Broacha Mills Ltd.	 briefly referred to as the Shapurji Broacha Company. The assessee company held all the " conversion " shares of the Dharamsi Company and a substantial majority of the " conversion" shares of the Shapurji Broacha Company. The Dalmia Investment Company Limited	 which will hereinafter be briefly referred to as the Dalmia Company	 wrote two letters to the assessee company on September 14	 1946. In these two letters	 the Dalmia Company offered to purchase 28	328 " conversion " shares of the Dharamsi Company at Rs. 500 per share together with the managing agency	 and also 75	212 " conversion " shares of the Shapurji Broacha Company	 together with the managing agency. We are not concerned with the other details mentioned in the two letters	 except this that the Dalmia Company made it clear that it would purchase both the mills or neither	 and a time limit till September 23	 1946	 3 p. m. was imposed during which the offer would remain open. This time limit was	 however	 extended later up to September 30	 1946. The letter further stated 1144 " On your accepting the offer	 we will pay to you Rs. 20 lakhs in the case of the Dharamsi Company	 Rs. 30 lakhs in the case of the Shapurji Broacha Company as and by way. of earnest money. You shall have to arrange to get the transfer of the managing agency sanctioned by the general body of the shareholders within a period of 40 days from the date of acceptance. As Boon as the transfer is sanctioned	 we will pay the balance of the purchase price. " On September 26	 1946	 there was a meeting of the Board of Directors of the assessee company. At that meeting	 the Board considered the offers made by the Dalmia Company and resolved to accept the offers. The Board further stated in its minutes that out of the total amount received from the sale of the shares	 a sum of Rs. 1 crore should be paid to the assessee company as compensation for ' the loss of the managing agency of the two mills. On September 30	 1946	 the assessee company wrote to the Dalmia Company accepting the offers made	 subject to a condition which is not material for our purpose. On the same date	 the Dalmia Company received the acceptance of the offers made by it and sent two drafts	 one for Rs. 20 lakhs and the other for Rs. 30 lakhs. On October 7	 1946	 the Dalmia Company wrote a very important letter to the assessee company. This letter said inter alia: " With reference to the interview our Solicitor Mr. Tanubhai had with your Mr. Wadia	 we beg to record that it is now being agreed upon as follows in modification of the arrangement previously made between yourselves and ourselves: (1)In our letters of offer which have been accepted by you	 it was arranged that the managing agency will be transferred either to us or to our nominees. Now	 instead of doing so by you	 you as the present managing agents will give their (sic) resignation	 so that at the time of delivery of the shares and payment of moneys	 your managing agency will have come to an end. In view of the above	 it is not necessary to obtain any sanction of general meeting. 1145 (2) 1. Mr. Shriyans Prasad Jain 2. Mr. Jaidayal Dalmia 3. Mr. Shanti Prasad Jain and 4. Mr. Vishnu Hari Dalmia will be appointed Directors of both the Mills Companies and thereafter all the present directors will tender their resignation. (3) Qualification shares in the names of the above proposed Directors will be transferred by you and the balance of the shares will be delivered to us along with the transfer deeds duly signed against payment. (4) You may communicate by a circular to the shareholders that you have resigned the managing agency. You may further mention in the circular that in accordance with the offer we are prepared to take up the deferred shares held by the shareholders which may be offered to us at the rate of Rs. 25 and Rs. 7 8 0 of Madhowji Dharamsi Manufacturing Co. Ltd. and Sir Shapurji Broacha Mills Ltd. Mills respectively within two months of the date of letter of offer which we would also send. " The assessee company accepted the modified arrangement suggested by the Dalmia Company	 and on October 19	 1946	 the assessee company wrote to the Dharamsi Company and the Shapurji Broacha Company that it had decided to resign the office of the managing agency and accordingly tendered its resignation on that date. The balance of the consideration money was then paid to the assessee company	 and it was not disputed that the. value of the managing agency was computed at Rs. 1 crore	 nor was there any dispute that the managing agency was a capital asset. Out of the said sum of Rs. 1 crore	 the Income tax Officer computed the capital gains at Rs. 81	81	900 and asked the assessee company to pay tax thereon. The Appellate Assistant Commissioner held that the assessee company had sold the managing agency and therefore the profits or gains arising from that sale were capital gains within the meaning of section 12B of the Act. The Income tax Appellate Tribunal	 Bombay Bench 'A '	 held	 however	 that there was no sale of the managing agency	 because the original contract of 147 1146 purchase was varied by the new contract embodied in the letter of October 7	 1946. The Tribunal	 however	 held as follows: " The assessee company was the owner of the shares and the managing agencies. It sold the shares to the Dalmia Co. and handed back the managing agencies to the managed companies. This handing back	 in our opinion	 constitutes a transfer of the managing agencies. " On that footing the Tribunal held that section 12B of the Act applied. On an application by the assessee company	 the Tribunal on being satisfied that a question of law did arise out of its order	 referred the question which we have already set out in an earlier paragraph of this judgment	 to the High Court of Bombay. The High Court answered the question in the negative on the ground that there was neither a sale nor a transfer of the managing agency within the meaning of section 12B of the Act. The point for our consideration is whether the High Court has correctly answered the question. We must first read sub section (1) of section 12B of the Act as it stood at the material time. The sub section	 so far as it is relevant for our purpose	 was in these terms: " The tax shall be payable by an assessee under the head 'Capital gains ' in respect of any profits or gains arising from the sale	 exchange or transfer of a capital asset effected after the 31st day of March 1946; and such profits and gains shall be deemed to be income of the previous year in which the sale	 exchange or transfer took place. " It is worthy of note that 'capital gains ' were charged for the first time by the Income tax and Excess Profits Tax (Amendment) Act	 1947	 which inserted section 12B in the Act. It taxed 'capital gains ' arising after March 31	 1946	 and the levy was virtually abolished by the Indian Finance Act	 1949	 which confined the operation of the section to 'capital gains ' arising before April 1	 1948. The Finance (No. 77 of 1956) re introduced the section in wider terms so as to bring within 'capital gains ' any profits or gains arising from the sale	 exchange	 relinquishment or transfer of a 1147 capital asset effected after March 31	 1956	 etc. ' We are not	 however	 concerned with the question whether the transaction under our consideration	 which took place in 1946	 resulted in capital gains within the meaning of section 12B as it stands after the enactment of the Finance (No. 77 of 1956). The question before us is whether the transaction under consideration resulted in capital gains within the meaning of section 12B as it originally stood. Two other points must be stated at the outset in order to clear the ground for a consideration of the relevant arguments advanced before us. The first point is that there is no question here of the assessee company trying to circumvent the provisions of section 12B of the Act by deliberately modifying the original agreement (by its letter dated October 7	 1946) so as to put the transaction outside the scope of that section. The agreement was modified in October	 1946	 before even the insertion of section 12B in the Act. Therefore	 no question of deliberate or fraudulent evasion arises in this case. The second point is that in construing fiscal statutes and in determining the liability of a subject to tax	 one must have regard to the strict letter of the law and the true legal position arising out of the transaction in question. The Bombay High Court has referred to a large number of English decisions on this point. We consider it unnecessary to examine those decisions in the present case. The point was considered very recently by this Court in A. V. Fernandez vs The State of Kerala (1)	 where the following observations made are very pertinent: " If the Revenue satisfies the Court that the case falls strictly within the provisions of the law	 the subject can be taxed. If	 on the other hand	 the case is not covered within the four corners of the provisions of the taxing statute	 no tax can be imposed by inference or by analogy or by trying to probe into the intentions of the legislature and by considering what was the substance of the matter. We must of necessity	 therefore	 have regard to the actual provisions of the Act and the rules made thereunder before we can come (1) (1957] S.C.R. 837. to the conclusion that the appellant was liable to assessment as contended by the Sales Tax authorities. " Those observations were made in a case dealing with sales tax but are equally applicable to the case under our consideration. Two conditions must be fulfilled before the transaction under our consideration can come within the purview of section 12B of the Act. The first condition is that the profits or gains must arise from the sale	 exchange or transfer of a capital asset; and the second condition is that the sale	 exchange or transfer must be effected after March 31	 1946. There is no doubt that the transaction before us was effected after March 31	 1946. There is also no dispute that the managing agency of the two mills which the assessee company held was a capital asset. Therefore	 the question boils down to this did the profits or gains	 namely	 the sum of Rs. 1 crore which was computed as the value of the managing agency	 arise from the sale or transfer of the managing agency ? The Income tax authorities held that there was a sale of the managing agency; but the Appellate Tribunal held that there was no sale in the strict sense but only a transfer of the managing agency to the managed companies	 that is	 the Dharamsi Company and the Shapurji Broacha Company. The High Court held that there was neither a sale nor a transfer	 because the letter of October 7	 1946	 substituted a different contract for the original contract entered into by the parties	 and the true legal position with regard to the substituted contract was that the assessee company resigned the managing agency	 or	 in other words	 the managing agency was relinquished by the assessee company. The learned Solicitor General	 who has appeared for the appellant	 has contested the correctness of the view of the Bombay High Court and has submitted a twofold argument before us. His first argument is that there was a concluded contract of sale as a result of the letters	 dated September 14	 1946	 and September 30	1946	 exchanged between the parties	 and the sale having taken place	 the letter of October 7	 1946	 which merely changed the mode of performance of the 1149 contract	 did not affect the true legal character of the 	transaction which was a sale of the managing agency. We are unable to accept this argument. The true legal effect of the letters dated September 14	 1946	 and September 30	 1946	 which contained an offer and an acceptance	 was merely this: the Dalmia Company offered to purchase (1) certain shares in the two mills and (2) the managing agency	 on payment of a certain consideration	 and the assessee company accepted that offer. In law	 this was merely an agreement to sell and purchase the shares together with the managing agency on payment of the consideration	 etc. The two letters did not by themselves amount to a sale of the shares or the managing agency	 in the sense of a transfer of the property in them. Before any such sale could take place	 the agreement was modified by the letter of October 7	 1946	 and instead of " selling " the managing agency the assessee company agreed to resign or relinquish the managing agency. We are unable to agree with the learned Solicitor General that the letter of October 7	 1946	 merely changed the mode of performance	 and did not constitute a now contract. In our opinion	 the Bombay High Court correctly held that whereas under the original contract the Dalmia Company wanted the managing agency to be transferred	 which meant that it wanted the benefit of that contract to be vested in it and was also prepared to accept the burden of the obligations that went with that contract	 under the substituted contract	 the Dalmia Company did not want the managing agency to be assigned to it; on the contrary	 it wanted the assessee company to relinquish its rights in the managing agency of the two mills by resigning. On a true interpretation	 the letter of October 7	 1946	 substituted a new contract	 a contract of relinquishment rather than a contract of sale	 so far as the managing agency was concerned. The second argument of the learned Solicitor General is that there was one indivisible consideration for the whole transaction	 including the sale of the shares and of the managing agency. So far as the shares were concerned	 the sale did take place and the entire 1150 consideration was paid; there was therefore a sale within the meaning of section 12B of the Act	 and the consideration being one and indivisible	 the transaction did result in capital gains within the meaning of that section. At the first blush	 the argument has an apparent merit of plausibility	 though it was not urged before the Bombay High Court in the manner in which it has been urged before us. On a closer scrutiny	 however	 it appears to us that this argument is not really available to the learned Solicitor General. The parties and the Income tax authorities	 including the Appellate Tribunal	 proceeded on the footing that part of the consideration	 namely	 the sum of Rs. 1 crore	 was the consideration for the sale or relinquishment of the managing agency	 the Department contending that the transaction was a sale or transfer and the assessee company contending that it was neither a sale nor a transfer but a mere relinquishment. In the agreed statement of the case	 it was stated : " The value of the managing agencies was computed by the assessee company at Rs. 1 crore and there is no dispute on this point. The Income tax Officer thereupon computed capital gain at Rs. 81	81	900 and again there is no dispute on this point. The question which the Tribunal had to determine was whether the transactions between the Dalmia Company and the assessee company resulted in a capital gain of Rs. 81	81	900. It is obvious that the entire assessment proceedings proceeded on the basis that the sum of Rs. 1 crore was the consideration for the sale or relinquishment of the managing agencies	 and the dispute between the parties was whether the transaction with regard to the managing agencies	 in its true legal character	 was a sale or transfer or relinquishment. That being the position	 it is not now open to the learned Solicitor General appearing for the Revenue to go behind the agreed statement of the case and to ask us to give an answer to the question of law raised in the case on different assumptions or in a different set of circum stances. The answer must be given on the basis of 1151 the facts and circumstances as stated in the agreed statement of the case. We are of opinion that the answer was correctly given by the High Court of Bombay. The transaction in its true legal character was a relinquishment of the managing agency and was neither a sale nor a transfer thereof. Therefore	 the High Court correctly answered	 the question in the negative. In the result	 the appeal fails and is dismissed with costs. Appeal dismissed.

The respondent company was the managing agent of two other companies holding certain shares therein. D wrote two letters to the respondent on September 14	 1946	 offering to purchase some of those shares together with the managing agency and agreeing to pay certain sums as earnest money on the acceptance of the offer and to pay the balance after the transfer of the managing agency was sanctioned by the general body of shareholders. By a letter dated September 30	 1946	 the respondent accepted the offer on condition of a sum of Rs. 1 crore being paid out of the consideration as compensation for the loss of the managing agency	 and on receipt of the letter	 D paid the earnest money. Subsequently	 D wrote a letter on October 7	 1946	 whereby	 in modification of the arrangement previously made	 it was agreed that instead of the managing agency being transferred by the respondent	 the latter would resign the office of managing agents and certain individuals would be appointed Directors of the two companies. Accordingly	 the respondent relinquished the managing agency and thereupon the balance of consideration money was paid to it. The Income tax Officer considered that section 12B of the Indian Income tax Act	 1922	 was applicable to the transaction and on the footing that the managing agency	 which was valued at Rs. 1 crore	 was a capital asset	 he computed the capital gains at Rs. 81	81	900. The Income tax Appellate Tribunal held that the respondent	 as the owner of the shares and the managing agency	 sold the shares to D and handed back the managing agency to the managed companies	 and that this handing back constituted a transfer. On a reference to the High Court by the Tribunal	 the agreed statement of the case proceeded on the basis that the dispute between the parties was whether the transaction with regard to the managing agency resulted in capital gains and the High Court held that there was neither a sale nor a transfer of the managing agency within the meaning Of section 12B of the Act. On appeal to the Supreme Court by the Commissioner of Income tax	 it was contended for him (1) that there was a concluded contract 1142 of sale as a result of the letters of September 14	 1946	 and September 30	 1946	 and a sale having taken place	 the letter of October 7	 1946	 merely changed the mode of performance of the contract and did not affect the true legal character of the transaction which was a sale of the managing agency	 and (2) that as there was one indivisible consideration for the whole transaction	 including the sale of the shares and of the managing agency	 the sale of the shares having taken place and the entire consideration having been paid	 there was a sale within the meaning of section 12B of the Act and the transaction resulted in capital gains. Held (1) that on a true construction of the letters there was originally only an agreement to sell the shares together with the managing agency and before the sale could take place the letter of October 7	 1946	 substituted a new contract	 a contract of relinquishment rather than a contract of sale	 so far as the managing agency was concerned	 and (2) that it was not open to the appellant to go behind the agreed statement of the case and raise a question of law based on different facts and circumstances. Accordingly	 the transaction in question was a relinquishment of the managing agency and was neither a sale nor a transfer within the meaning of section 12B of the Indian Income tax Act.