CHAKRAVARTTI, C. J.

( 1 ) THIS Reference comes to us on a supplementary case stated by the Income-tax Appellate Tribunal in pursuance of an order made by us on 11-5-1953.

( 2 ) THE assessee is a Hindu undivided family of the name of Kalu Babu Lalchand of which the. Karta is one Mr. B. K. Rohatgi. It appears that in the year 1930 Mr. Rohatgi became interested in a concern called the India Electric Works and promoted the formation of a company for taking it over. The actual incorporation of the company took place on 19-12-1930. Article 132 of the Articles of Association provided that the first Managing Director would be Mr. B. K. Rohatgi or "his assigns or successors in business whether under his name or any other style or firm" and that he would continue to be Managing Director until he resigned or was found guilty of any act of fraud or dishonesty or was removed in the manner provided in the Article next following. The next Article laid down the procedure which would have to be followed if the company desired to remove Mr. Rohatgi from his position of Managing Director at any time. Article 138 next provided that the company would forthwith enter into an agreement with Mr. Rohatgi

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