JUDGMENT

Bharucha, J.-This is a reference under Section 257 of the Income Tax Act, 1961, made by the Income Tax Appellate Tribunal directly to this Court in view of the difference in the views taken by the Allahabad and Calcutta High Courts upon the same issue. The question to be answered reads thus :

"Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the pre-incorporation profits of Rs. 24,862/- cannot be included in the assessment of the assessee-company for the Assessment Year 1974-75?"

2. The assessment year is the Assessment Year 1974-75. The relevant accounting year ended on 30th September, 1973. The assessee company was incorporated on 30th October, 1972. It filed a return for Assessment Year 1974-75 disclosing an income of Rs. 1,79,690/-. The Income Tax Officer assessed the assessee company s total income at Rs. 2,04,530/-. In so doing, he included, inter alia, the sum of Rs. 24,862 as the assessee company s pre-incorporation profit. He found that the promotors of the assessee company had carried on business on its behalf and had received the sum of Rs. 80,534/- for the period 1st October to 29th October, 1972. After