Alfred Henry Lionel Leach, C.J.

1. The main question raised in this reference is whether a partner who continues the partnership business after the dissolution of the partnership succeeds to the business within the meaning of Section 26(2) of the Indian Income Tax Act, 1922. On the 16th September, 1935, the assessee and one Venkatarama Aiyar entered into a partnership for the production and exhibition of a cinema film called "Pathi Bhakthi". .The partnership continued until the month of May of the following year, when Venkatarama Aiyar retired from the partnership and was paid the amount of the profits which represented his share, namely, the sum of Rs. 9,524. Thereafter the film was exhibited by the assessee for his own benefit. For the assessment year 1937-38 the Income Tax authorities assessed Venkatarama Aiyar in respect of this sum of Rs. 9,524 and he paid the tax, but later the Income Tax authorities considered that they were wrong in so doing, and to have the question settled, the Commissioner of Income Tax has, under the provisions of Section 66(2) of the Act, referred the following question:

Whether the provisions of Section 26(1) or Section 26(2) of the Act are appl