1. This is a reference under S.60(1) of the Indian Income - tax Act.
The assessee which is a partnership firm, was appointed by the British India Corporation as the sole selling agent of one of its managed concerns, the Cawnpore Cotton Mills, under an agreement D/- January 22, 1946. The agreement, which was originally intended to endure for one year, was subsequently extended from time to time. It appears that the assessee was informed that his continuation as sole selling agent was not considered feasible as it was no longer in a position to run the selling agency in accordance with the wishes of the British India Corporation. The assessee also owed the Corporation a sum of Rs, 8,39350-15-6, which, it seems, it was unable to pay. On March 23, 1955, the assesses entered into a written agreement with me Kailash Nath Agarwal, the preamble to which recited the circumstances in which the assessee was unable to continue as sole selling agent and also the circumstance that the British India Corporation intended to appoint the said Kailash Nath Agarwal or a firm or limited company managed and controlled by him as sole selling agent provided the assessee and Kailash Nath Agarwal were succe