SUDHINDRA MOHAN GUHA, J.

( 1 ) THE present reference under Section 256 (1) of the I. T. Act, 1961, relates to the assessment years 1968-69 and 1969-70. The assessee-firm was reconstituted by a deed of partnership dated May 20, 1967, w. e. f. April 1, 1967, by introducing a new partner, Sri K. K. Nijhewan. Prior to the reconstitution, there were two partners, Sri Basheshar Lal and Smt. Gayanwanti Devi, having equal shares and the firm had been allowed registration. The business of the firm was of road transport. Material clauses of the reconstituted partnership deed are as follows:" (a) The capital shall be Rs. 40,000 or more as would be mutually decided from time to time and the said capital to be contributed by the first and the second party in equal proportions. (b) The partnership firm is the owner of several lorries. The accounts of the said lorries would be kept separately and any income and/or losses from the business done by the said lorries would be divided between the first and the second party in the following proportions: 1. Sri Basheshar Lal (first party) 50% 2. Smt. Gayanwanti Devi (second party)50% The third party will not be entitled to share any income and/or loss

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