HARRIES, C.J.

1. THIS is a reference made by the Tribunal at the instance of the CIT, West Bengal, in which the Court is asked to express its opinion upon the following question :-

"Whether in the facts and circumstances of the case the Tribunal was right in holding that in the assessment of the income for the asst. yr. 1938-39, s. 23(5)(a) which was introduced in the Indian IT Act in 1939 was applicable ?"

2. THE Tribunal had held that the section was applicable disagreeing with the view of the ITO and the AAC. The assessee was a firm, P. M. Bagchi and Co., which had been in existence for some time though its constitution had changed. In the year 1937 a receiver was in possession of the partnership assets on behalf of the then partners. On 16th Dec., 1937, the receiver sold the right, title and interest of these three partners in the business and the present assessees purchased. The year of assessment is the year 1938-39 the accounting year being 1937-38. There was difficulty in the assessment as the tax authorities claimed that certain income had escaped assessment and should be assessed under s. 34 of the Indian IT Act. Eventually an assessment was made on 31st March, 1943