1. Under Sec. 68(1), Income Tax Act, the Appellate Tribunal had referred the following question of law for the determination of the High Court, viz.,

"whether on the facts and in the circumstances of this case the Tribunal was right in holding that there was neither a discontinuance in, nor any succession to, the appellants business as contemplated by Sec.25(3) and Sec.25(4) of the Income Tax Act."

2. The material facts leading up to this reference are not in dispute. The assessee was a firm named Jittanram Nirmalram constituted of four partners, viz., Rai Bahadur Ramchandram, Lakshmi Narain Bhadani, Vishnu Prasad Bhadani and Bhagwandas Bhadani. It is stated that on 9-11-1942, Bhagwandas gave a notice severing his connection with the firm and commencing a new business of his own Known as Nirmalram Hariprasad. At the time when Bhagwandas gave the notice and severed his connection his share in the profits and assets was computed to be over one and a half lacs which amount was paid to him partly in, cash and partly by allotting to him a cloth shop previously carried on by the firm.

It is conceded that after 9-11-1942 the firm continued to deal in grain, hardware, sugar, petrol