Judgement

SHAH, J.: These are cross appeals from the order passed by the High Court of Bombay recording answers to questions submitted in a reference under S. 66 of the Indian Income-tax Act, 1922.

2. Messrs. Killick Nixon and Co.-hereinafter called the assessee -was a firm which carried on diverse trading activities in Bombay. The assessee agreed to sell on November 28, 1947 to a Company called "Killick Industries Ltd.", the benefit of managing agency contracts held by it, shares of limited Company (including 240 shares of the Cement Agencies Ltd.) and debentures, and book and other debts in consideration of 79,998 shares of the face value of Rs. 100 each of Killick Industries Ltd., and Rs. 700 in cash. By another agreement, dated January 29, 1948 the assessee agreed to sell to "Killick Nixon and Co., Ltd." goodwill of the business of the assessee, freehold and leasehold hereditaments, plant and machinery, stock in trade and book debts, Government securities and shares and full benefit of all shipping and general agencies, distributorship, etc. in consideration of 9,996 shares in the Vendee Company of the face value of Rs. 100 each and Rs. 400 in cash. The assessee was dissolved an