S.R.DASS, J.

(1) V.D.TALWAR, who was assessee before the taxing authorities and whose legal representatives on his death are appellants before us, was employed as the General Manager of Messrs J. K. Iron and Steel Company Ltd., Kanpur. The terms of his employment as agreed upon by the assessee and the Company were incorporated in an appointment letter dated 7/02/1946. A formal memorandum of agreement was also executed between the parties on 9/02/1946. The assessee actually joined the service of the company on 1/05/1946. According to the service agreement the pay of the assessee was fixed at Rs. 200.00 per month with an increment of Rs. 100.00 p.a. subject to certain deductions for income-tax, absence of duty etc., which need not be set out in detail for the purpose of this case. According to the agreement the period of service was for five years. Clauses (5) and (6) of the appointment -letter read`(5) Period of agreement of service to be five years. (6) Termination of service if within five years to be on notice of twelve months on either side or salary in lieu thereof. ` Clause (1) of the memorandum of the agreement dated 9/02/1946 said that the employee shall serve the emp