(1.) THERE was a joint family of a father and two sons, Sahu Nand Lal Saran, Shiva Shakti Saran and Raghubir Saran. This joint family was carrying on money-lending business. THERE was a partition on 10th March 1930, and the father and the two sons separated. After the separation, the father carried on the separate money-lending business and the two sons entered into a partnership, and the partnership also, under the name and style of Messrs. Shiva Shakti Saran Raghubir Saran of Moradabad carried on money-lending business. Sahu Nand Lal Saran was assessed to Income tax out of the income made by him from the money-lending business and from his other properties, and the partnership firm of Messrs. Shiva Shakti Saran Raghubir Saran of Moradabad was separately assessed to Income-tax as an unregistered partnership.
(2.) SAHU Nand Lal Saran had during the previous year 1937-38 made some income by his money-lending business and a notice was issued to him by the Income-tax Officer under Section 22 (2), Income tax Act. While the assessment proceedings were still pending, on 29th February 1938, SAHU Nand Lal Saran died. Under his will dated 15th May 1936, this money-lending business was inherited by his two sons, Shiva Shakti Saran and Raghubir Saran. Shiva Shakti Saran and Raghubir Saran, who were carrying on their money-lending business in partnership, continued to carry on the money-lending business which they had inherited from SAHU Nand Lal Saran, and it was found by the Commissioner of Income-tax that both these businesses were carried on together and treated as branches of the same business. The Income-tax Officer passed the assessment order on 22nd February 1939, and in that he added a sum of Rs. 5438/-, which was the profit made out of the business carried on by SAHU Nand Lal Saran in the previous year 1937-38 before his death, to the profits made by the partnership which was Rs. 16,902/-.
(3.) ON the finding arrived at by the Commissioner that the business of money-lending carried on by Sahu Nand Lal Saran was now being carried on by the unregistered firm of Shiva Shakti Saran Ragubir Saran, the question arises whether the firm, Shiva Shakti Saran Raghubir Saran, can be deemed to be the successors of the business carried on by Sahu Nand Lal Saran.