Judgement

S. R. DAS CJI.: This appeal by special leave is directed against the order of the High Court of Calcutta passed on 8-9-1955, on a reference made by the Income-tax Appellate Tribunal under S. 66 (1) of the Indian Income-tax Act whereby the High Court answered the first question referred to it in the negative and the second question in favour of the respondent assessee. The facts leading up to the present appeal are briefly as hereinafter narrated.

2. The respondent was at all material times a Hindu undivided family of which one B. K. Rohatgi was the eldest male member and as such its karta . It appears that in 1930 the said B. K. Rohatgi became interested in a concern called the India Electric Works carried on by Milkhi Ram and other persons none of whom was a member of the assessee family. Evidently it was decided that a Company would be floated, inter alia , for the purpose of acquiring and taking over the said India Electric Works as a going concern. The said B. K. Rohatgi was one of the promoters of that Company. Pursuant to an agreement with the vendors of the business of India Electric Works the said B. K. Rohatgi, as such promoter as aforesaid and on behalf of the s