1. The facts leading to the question referred to this court, which question has been argued with ability by the Counsel of the assessee, may be shortly stated. Twelve persons have formed a partnership under a deed of August 23, 1949. Some of these partners had earlier obtained several tobacco licences for the year 1125 at the auction conducted by the then Cochin Government, and the partnership had been formed to exploit the licences obtained by the partners; as well as two licences held by the strangers. Para 2 of the partnership deed provides that the shops, for which the licences were held, should be run under the trade name of "Union Tobacco Company, Ernakulam" and in accordance with the terms and conditions of the deed. The document further provides that the business should be owned by the partners in four equal

shares; one share to be held by a group consisting of three partners another by a group comprising of two; the third by another group of two partners; and the fourth share by five partners. Para 4 of the deed also provides that the profits or losses of the partnership should be divided among the 12 partners in the manner mentioned therein. Para 8 states that