Judgement

Patanjali Sastri, C.J.I. : This is an appeal by special leave from a judgment of the High Court of Judicature at Calcutta answering a Reference by the Income-tax Appellate Tribunal under S. 66 (2), Income-tax Act, 1922, hereinafter referred to as "the Act".

2. The appellant. is a registered firm consisting of two brothers as partners with equal shares., The firm was carrying on business at Calcutta as bullion merchant.; dealing mainly in silvery and kept its books of account on the mercantile basis. In the course of the year of account 1997 (Ramnavami) corresponding to 1941-42, 582 bars of silver (some from the old stock in hand at Calcutta and some purchased elsewhere during the year) were sent to Bikaner where the partners resided, and their value at cost was credited in the books of the firm.

In the assessment of the firm for the year 1942-43, it was alleged that the said silver bars had been sold to the partners for their domestic use ) but the Income-tax authorities held that the alleged sale was not" genuine and that the said silver bars still formed part of the stock in trade of the firm at the close of the previous year 1997. and they accordingly included in the ta