Judgment

RAMASWAMI, J. : This appeal is brought, by special leave, on behalf of the assessee from the judgment of the Bombay High Court, dated March 15, 1961 in Income-tax Reference No. 56 of 1960.

2. The assessee is a partnership firm constituted under a Deed of Partnership, dated March 19, 1950. The partners are three brothers-Nandlal Bhimjibhai, Tarachand Bhimlibhai and Rajnikant Bhimjibhai, each one having an equal 1/3rd share in the partnership firm. Prior to November, 1949, the three partners of the assessee-firm in partnership with eight others carried on business in Bombay and other places in the name and style of "Rajnikant Vitheldas and Co.". In that larger firm, each one of the three brothers had an equal two annas share each, the other eight partners having the remaining ten annas share. The larger partnership of Rajnikant Vitheldas and Co. was dissolved on October 31, 1949 and on its dissolution the business of the two branches thereof at Nagpur was allotted to the three brothers, who thereupon as from November 1, 1949 constituted themselves into a new firm, viz., the assessee-firm under the deed of partnership executed on March 19, 1950. This document recites that the