JUDGMENT :

P.N. Bhagwati, J.

These two references arise out of assessments to income-tax made on the assessee for the assessment years 1960-61 to 1965-66 for which the relevant accounting years were the financial years ending on 31st March, 1960, to 31st March, 1965. The assessee in each reference is a Hindu undivided family. One Vidyasagar is the karta of the Hindu undivided family in Income-tax Reference No. 50 of 1970, while one Prafulkumar is the karta of the Hindu undivided family in Income-tax Reference No. 54 of 1970. Vidyasagar and Prafulkumar are the sons of one Jethabahi. Jethabhai had four sons, namely, Kantidev, Arvindkumar, Vidyasagar and Prafulkumar and they constituted a Hindu undivided family. This Hindu undivided family was disrupted by partition on 27th September, 1948, and the business, which was till then being carried on by it as joint family business, was converted into partnership business with Jethabhai and his four sons as partners. The partnership of Jethabhai and his four sons carried on the business but it ran into heavy losses and a large amount had to be borrowed by it from one Rambhai. Ultimately, the partnership was reconstituted by the admission of Ra