Judgement

MAHAJAN J. : This is an appeal from a judgment of the High Court of Judicature at Calcutta delivered in a reference under S. 66 (1), Income-tax Act, whereby the High Court answered the question referred in the affirmative.

2. The assessee is a partnership concern. When income-tax was paid under the Act of 1918, the partnership concern consisted of three partners, Mathews, Figgies and Notley. The name of the firm was A. W. Piggies & Co., and its business was that of tea brokers. There were several changes in the constitution of the firm resulting in a change in the shares of the partners. In 1924, Mathews went out and his share was taken over by Piggies and Notley. In 1926 another partner Squire was introduced. In 1932 Figgies went out, and from 1932 to 1939 the partnership consisted only of Notley and Squire. In 1939 Hillman was brought in and the partnership consisted of these three partners. In 1943 Notley went out and the partnership business was carried on by the two partners, Squire and Hillman. In 1945 Gilbert was brought in. This arrangement continued up to 31st May 1947 when the partnership was converted into a limited company.

3. For the assessment year 1947-48 the