JUDGMENT

SABYASACHI MUKHARJI, J.:— These appeals by special leave are from the judgment and order of the Division Bench of the Allahabad High Court dated 4th August, 1972 (reported in 1972 UPTC 509).

2. M/s. J. K. Hosiery Factory, Kanpur, the assessee firm herein, originally consisted of Sir Padampat Singhania, L. Lakshmipat Singhania and L. Kailashpat Singhania and J. P. Agarwal as partners. In January, 1946, the three Singhania brothers appeared to have retired from the firm and in their place the Kamla Town Trust was alleged to have become partner.

3. The revenue challenged this reconstitution of the firm and according to the revenue, the Singhania brothers never retired and the trust never became a partner. Four questions were referred by the Tribunal to the High Court under S. 66(1) of the Indian Income-tax Act, 1922 (hereinafter called the Act). The question No. 4 is the only question canvassed before us and survives for these appeals. The same is as follows :

"Whether, under the provisions of S. 10(2)(v), proviso (b) of the Income-tax Act, the unabsorbed depreciation of the unregistered firm in 1949-50 can be allowed as a deduction in the assessments of the partners of the regi