FALSHAW, J.

1. The following question has been referred to this court by the Income-tax Appellate Tribunal under section 66(1) of the Income-tax Act :

"Whether there was a valid gift of Rs. 60,000.00 on December 5, 1956, by merely transferring Rs. 60,000.00 from the capital account of L. Nawal Kishore to the account of donees as mentioned in paragraph 3(c) above, so that the interest of the various accounts comprises a proper deduction under section 10(2) (iii) of the Income-tax Act ?"

2. The case refers to the assessment of the partnership firm, M/s. Bali Mal Nawal Kishore, for the year 1957-58 for which the accounting year ended on the 31st of March, 1957. There were five partners in the firm, Nawal Kishore, his three sons, Jagan Nath, Deoki Nandan and Lal Chand, and also Atma Ram, who was apparently the natural son of Nawal Kishore, but was the adopted son of one Raje Lal. Nawal Kishore died on the 14th of December, 1956, but 9 days before he died, on the 5th of December, 1956, he made an entry in his own hand in the account books of the firm to the effect that he was making a gift of Rs. 60,000.00 out of an amount of some Rs. 81,000.00 standing to his credit in his capi