( 1 ) THIS is a reference under Section 66 (1), Income-tax Act. Two questions have been referred to us, one at the instance of the Commissioner of Income-tax and the other at the instance of the assessee. The questions referred for decision are :

"1. Whether in the circumstances of the case the Appellate Assistant Commissioner was empowered under the law to cancel the assessment and whether the order in appeal passed by the appellate Assistant Commissioner was within the ambit of his powers under Section 31, income-tax Act? Whether in the circumstances of the cage the income of the period from 11th December 1942, to 10th December 1943, could be legally assessed in the hands of the assessee company which was incorporated on 11th December 1943"

( 2 ) THE facts found in the appellate order of the income-tax Tribunal and which are stated in the statement of the case are that Messrs. David Mills Ltd, were previous owners of the Bijli Cotton mills at Hatnras. Messrs. Shyamlal Chimanlal, a partnership firm, thought of acquiring the Bijli cotton Mills for a sum of 15 lacs on behalf of a company, which they were going to get incorporated. Messrs. Shyamlal Chimanlal paid the stipula