Satyanarayana Rao, J.-These two referred cases arise from the same facts, and the assessee in both is the same. R.C. No. 1 of 1950 relates to the assessment for 1944-45, the accounting year being the year ending on 24th March, 1944. In R.C. No. 1 of 1950 the question referred to us for decision by the Incometax Appellate Tribunal is ‘‘whether on the facts and in the circumstances of the case and on a proper construction of the deeds of partnership and partition dated 22nd June, 1943, the finding of the Tribunal that the cloth business continued to belong to the Hindu undivided family is erroneous in law." R.C. No. 2 of 1950 arises out of proceedings for registration of the partnership of Jakka Devayya and sons under section 26-A of the Income-tax Act, and the question referred to us for decision under section 66(1) of the Income-tax Act by the Income-tax Appellate Tribunal is, "Whether on the facts and in the circumstances of the case, there was a valid partnership in respect of the cloth business which could be registered under section 26-A of the Income-tax Act?" Upto June, 1942, the assessee was a Hindu undivided family. During the assessment year 1943-44 the assessee claimed that there was a partition of the family properties in June 1942 and the Income-tax Officer after examining the evidence adduced by the assessee held that there was a division of the family properties on 4th April, 1943. On the strength of this decision the assessee claimed during the assessment year now under consideration that the business carried on during the accounting year was the business belonging to a firm consisting of the erstwhile members of the Hindu undivided family, and that the firm should be registered under section 26-A of the Act, and the assessment should be also repaid from that date. These two claims were rejected by the Department and also by the Appellate Tribunal. Hence these two references.

The family consisted of three brothers, Lakshminarayana, Krishnamurthi and Subbarao. Subbarao was a minor. On the 24th June, 1942, an unregistered partition list was drawn up between the members, and the minor Subbarao was represented by the eldest brother and manager Lakshminarayana. The family owned gold jewels, silverware, utensils, and furniture, houses and house-sites and cloth business. On the date of this list Subbarao was unmarried. The jewels, silverware and other movables were divided between the sharers, and they took separate possession of those properties which were divided. They did not, however, divide by metes and bounds the houses and house-sites, because as per the directions of their deceased father they had to make provision for their widowed sister, and the division of the dwelling-houses and the sites would necessitate certain structural alterations for the convenient enjoyment of the sharers which they did not intend to carry out during the minority of Subbarao, especially as he was unmarried. They therefore decided to keep these properties jointly. As regards the cloth business in this document, an account of the business was taken after valuing the stock on hand, and a balance-sheet was embodied in the document. Details with reference to the property which was kept in joint possession were given in schedule D appended to the document. The document contains a clear determination and an unambiguous declaration that the members decided to become separate and to divide the properties; only the physical division of the assets included in schedule D was postponed to a later date. By June, 1943, Subbarao was married. On 26th June, 1943, two documents came into existence. One was a partition deed, and the other was a deed of partnership. The partition deed was registered. In this deed the minor was represented by his father-in-law. It contains a resolution to keep the houses and house-sites joint, and that as there was no possibility to divide the cloth business consisting of cloth, furniture, etc., the business should be ca

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