TULZAPURKAR, J. - (1.)THIS is a reference under section 66(1) of the Indian Income -tax Act, 1922, and at the instance of the assessee the following two questions of law stated to be arising out of the Tribunal's order have been referred to us for our determination :
'(1) Whether, on the facts and in the circumstances of the case, and having regard to the terms of annexure 'A' (partnership deed dated August 28, 1950) the amount of Rs. 2,61,821 derived from the firm of M/s. Bhogilal Laherchand accrued to Arvind at any time on or before August 31, 1950, so as to attract section 24B of the Income -tax Act ? (2) Whether, on the facts and in the circumstances of this case, the sum of Rs. 2,61,821 was exempt as capital receipt ?'

(2.)THE questions relate to the assessment year 1951 -52, the corresponding accounting year being S.Y. 2006 (October 22, 1949, to November, 9, 1950) and arise out of these facts Ms. Bhogilal Laherchand is a firm originally constituted under a deed of partnership dated April 14, 1943. Initially, Bhogilal and his major son, Pratap, were partners in the said firm and two minor sons of Bhogilal by names Arvind and Mahesh were admitted to the benefits of the partnership. Arvind attained majority on August 23, 1950, and elected to become a full -fledged partner. A fresh deed of partnership was entered into on August 28, 1950, a copy whereof is annexed as annexure 'A' to the statement of case. Unfortunately, within three days of the execution of the partnership deed, Arvind met with a plane crash in Cairo which resulted in his death on August 31, 1950. However, in accordance with clause 8 of the partnership deed, the partnership business was continued by the surviving partners and on November 9, 1950, the books of account of the firm were closed wherein a sum of Rs. 2,64,450 was credited to the account of Arvind as his share of profits for the period October 22, 1949 to August 31, 1950. On February 27, 1954, the firm was assessed for the assessment year 1951 -52 as a registered firm and thereafter the assessment of the share of profits of Arvind from the firm was taken up and the Income -tax Officer applying the provisions of section 16(3)(a)(iii) of the Act included a sum of Rs. 2,49,459 being the proportionate part of his share up to August 22, 1950, in the assessment of his father, Bhogilal. In other words, Arvind's share of profits during his minority was included in the assessment of his father. A proportionate part of profits of Arvind for the period between August 22, 1950, and August 31, 1950, was calculated at Rs. 11,153 and was assessed by an assessment order dated January 17, 1953. This assessment was revised by an order dated November 20, 1954, whereunder the amount brought to tax was raised to Rs. 58,917.
Against the order whereby the amount of Rs. 2,49,459 was included by the Income -tax Officer in the assessment of Arvind's father, Bhogilal, Bhogilal preferred an appeal first to the Appellate Assistant Commissioner and thereafter to the Tribunal and ultimately he contested this inclusion in his assessment up to this court. The reference was decided by this court on September 15, 1955 - which decision is reported as Bhogilal Laherchand v. Commissioner of Income -tax - and this court answered the question referred to it in favour of Bhogilal and held that the said sum of Rs. 2,49,459 included in his assessment on account of Arvind did not represent profits of the partnership to which Arvind, as a minor, was entitled.

(3.)AFTER Arvind's father's reference was thus answered in his favour, proceedings under section 34(1)(b) were initiated by issuance of a notice which was served on Bhogilal on January 24, 1956, as the father and legal heir of deceased Arvind. On January 22, 1957, reassessment was made on the income of Rs. 3,20,738 which was computed as under :
Rs.(a) Income as originally assessed as per the order 58,917dated 20 -11 -1954(b) Share from M/s. Bhogilal Laherchand betweenthe beginning of S.Y. 2006 and 22 -8 -1951 2,61,821 - - - - - - - - -3,20,738 - - - - - - - - -