Judgement

RAGHUBAR DAYAL, J.: This is an appeal under S. 66A(2) of the Indian Income-tax Act.

2. The appellant, the National Steel Works Ltd., Bombay, a limited liability company, hereinafter referred to as the assessee, carried on the business of a Rolling Mill prior to the partition of the country in the territory now in Pakistan. It was a member of the Steel Rolling Mills Association of India and as such was receiving a quota of coal and steel from the Government of India. After the Partition, its registered office was shifted to Bombay. It had no factory there for carrying on the business of a rolling mill. Though possibly not entitled to receive the quota of coal and steel, it however continued its membership of the Steel Rolling Mills Association of India and continued to received the quota of coal and steel. In order to utilise the coal and steel so received, it entered into a partnership with one K. R. Irani who had put up a factory in Bombay called the New Era Iron and Steel Works, but had no quota of steel and coal. The agreement of partnership entered into between Irani and the assessee on September 29, 1948, provided that the partnership would continue so long as the q