Malik, C.J. - (1.) This a reference under Section 66 (1), Income-tax Act of 1922. The question referred to us runs as follows: "Whether on the facts found by the Tribunal the benefit of Section 25 (4) is equally applicable to the business income done under the style of Prahlad Singh Dhuru Prasad started in 1933?"
(2.) There was a sarrafa shop known as Hargyansingh Jagannath, Meerut. It was carried on by three brothers of a Hindu undivided family, viz., Prahlad Singh, Dhuru Prasad and Prakash Chandra. In 1933 the joint family entered into a partnership with one Gangu Mal and a new firm known as Prahlad Singh Dhuru Prasad was started. In this firm the same type of business, i. e., sarrafa business, was carried on and the joint family had eight annas share in it and the other eight annas belonged to Gangu Mal. During this period the joint family sarrafa business continued to be carried on. The Appellate Tribunal came to the conclusion that this was a separate business and there was no interlacing between this partnership business and the old joint family sarrafa business. The facts on which this conclusion is based fare as follows : (1) That the partnership business of Prahlad Singh Dhuru Prasad was started in the same locality but at a shop different from the one in which the ancestral sarrafa business was being carried on : (2) that the partnership firm had a separate establishment; (3) that the partnership firm had separate sets of accounts; (4) that the management of this new firm was separate; (5) that the outsider who was a partner in this business had a half share and the other half share belonged to the Hindu undivided family; (6) that at the end of the assessment year when the profits and loss account was worked out, half share of the profits was given to the Hindu undivided family and it was then entered in their books; (7) that it was admitted that the discontinuance of the Hindu undivided family sarrafa shop could not result in the automatic discontinuance of the firm's sarrafa shop; (8) that the control and management of the partnership firm's business was not vested in the Hindu undivided family as such; and (9) that there was no interlacing of the two. On these findings there was no doubt that the Tribunal could come to the conclusion that the partnership business that was started in 1933, though it was also a sarrafa business, was a separate business.
(3.) In 1934 the stranger partner in Prahlad Singh Dhuru Prasad firm went out and the Hindu undivided family took over the sarrafa business of that firm. There was a partition in October 1945 when Prahlad Singh got, under the partition, both the businesses, i. e., the business of the joint family firm known as Hargyansingh Jagannath and the business of Firm Prahlad Singh Dhuru Prasad. The old joint Hindu family firm known as Hargyansingh Jagannath was assessed to income tax under the Income tax Act of 1918 and, on the succession of the business in 1945 by reason of the partition and by reason of the business having been handed over to Prahlad Singh, the question arose whether the joint family could claim a relief under Section 25 (4), Income-tax Act. The point for consideration was whether a relief could be claimed only with respect to the amount paid as income-tax on the profits made by the joint Hindu family firm known as Hargyansingh Jagannath, or with respect to the profits of Firm Prahlad Singh Dhuru Prasad also. The Income-tax Officer, the Appellate Assistant Commissioner and the Tribunal all came to the conclusion that the partnership firm was a separate and distinct business which, was started in 1933 and as it had not paid any income-tax under the Income-tax Act of 1918, no relief was claimable with respect to the profits made by this firm.;