- (1.) THIS is a reference made by the Income Tax Appellate Tribunal, Patna Bench, Patna (hereinafter referred to as "the Tribunal") under Sec. 66(1) of the Income Tax Act, 1922 (hereinafter referred to as "the Act"), at the instance of the assessee, Messrs. Abdul Shakoor and Co. (hereinafter referred to as "the assessee"). The statement of the case relates to the assessment years 1956 -57 and 1957 -58.
(2.) ONE Abdul Shakoor carried on business under the name and style "Messrs. Abdul Shakoor and Co.". Up to the year 1955 -56 he was assessed in respect of the business that he carried on in the status of an individual. For the assessment year 1955 -56 two returns were filed in the name of Messrs. Abdul Shakoor and Co. - one of the period January 1, 1955, to June 30, 1955 in the status of an individual and the other for the period July 1, 1955, to December 31, 1955, in the status of the firm.
(3.) IT was alleged on behalf of the assessee that on July 30, 1955, Abdul Shakoor made a gift of Rs. 10,000 each to his sons Abdul Rauf, Mohd. Ayub, Mohd. Daud and Abdul Wadood (minor). It was further alleged that the aforesaid gifts were evidenced by transfer of the amount mentioned above from the account of Abdul Shakoor to the accounts of the sons mentioned above in the books of Messrs. Abdul Shakoor and Co. The assessee alleged that Sarvsri Abdul Rauf, Mohd. Ayub and Mohd. Daud formed a partnership with Abdul Shakoor with effect from July 1, 1955, to the benefits of which the minor son, Abdul Wadood, was also admitted. According to the assessees, the shares of the partners were as under : The books of Messrs. Abdul Shakoor and Co. were shown to have been closed twice during the calendar year 1955, once on June 30, 1955, and second time on December 31, 1955. On October 15, 1956, an application was made under Sec. 26A of the Income Tax Act for the registration of the firm for the period July 1, 1955, to December 31, 1955. ;