K.L. Pandey, J. - (1.)THIS is a case stated by the Income -Tax Appellate Tribunal, Bombay, in pursuance of an order issued by this Court under sub -section (2) of Section 66 of the Indian Income -Tax Act, 1922. The question of law propounded by, and referred to, this Court is as follows: -
Whether there is material on record to support the finding that the businesses carried on in (1) Bhatapara hardware shop, (2) Belha shop, (3) Mungeli shop and (4) Ramanlal Mohanlal shop, Raipur, were not extensions of the old businesses but were separate and independent businesses ?

(2.)THE facts of the case, briefly stated, are these. Long prior to the year 1918, two divided brothers, Balkishan and Ramkishan, carried on business in partnership under the name and style of Seth Balkishan Ramkishan Nathani. Tax was charged under the provisions of the Indian Income -Tax Act. 1918, on the business which they carried on. On 31 December 1938. Balkishan and Ramkishan agreed to divide their business which had a head office and several branches. The arbitrator nominated by them made actual division by two awards dated 15 March 1939 and 11 October 1939. As a result of the division, each shop was taken over by one or the other of the two brothers as a going concern together with its books. Neither the books of the firm were balanced nor the profits capitalised or distributed. Thus each brother continued the business that fell to his share. It appears that, following the dissolution of the old firm, Ramkishan and his four sons separated and then formed a new partnership and carried on business under various names including Saligram Nathani. Although Ramkishan died on 28 May 1939, the partnership continued upon terms and conditions incorporated in the partnership deed dated 11 April 1940 until it was dissolved on 21 July 1948. As before, the business carried on at several places did not go as a whole to one or the other of the four brothers but each shop was taken over by one or the other as a going concern. It may be mentioned here that; on 21 July 1948, the four sons of Ramkishan carried on business in eight shops and of these, Raipur Main shop (grain and hardware), Raipur Gunj shop (grain), Bhatapara shop (grain and sundries) and Noora shop (grain and sundries) were existing from before 1918 and Bhatapara shop (hardware), Belha shop (grain), Mungeli shop (grain) and Ramanlal Mohanlal shop, Raipur (hardware) were new shops opened between 31 December 1938 and 8 March 1941.
On 13 January 1950, Mohanlal son of Ramkishan, a partner of the firm Saligram Nathani, applied for relief under Section 25 (4) of the Indian Income -tax Act, 1922 (here, in after called the Act). Another line application signed by the four sons of Ramkishan was made on 11 April 1950. The assessment year was 1949 -50, the previous Diwali year being 13 November 1947 to 21 November 1948. The applicants claimed relief on the ground that the business carried on in the 8 shops mentioned in the last paragraph was charged to tax under the provisions of the Indian Income -tax Act, 1918, that the business carried on in the four new shops was merely an extension of the business carried on in 1918 and that they had, as a result of the dissolution of the firm on 21 July 1948, succeeded to that business within the meaning of Section 25 (4 of the Act. The Income -Tax Officer allowed the relief claimed only in respect of the business carried on in the four old shops and held that the applicants were disentitled to that relief in respect of the business carried on in the four new shops on the ground that the business was not an extension, or a slice taken out, of the old business and was not charged to tax under the 1918 Act. The Appellate Assistant Commissioner also took the same view, which was ultimately affirmed by the Appellate Tribunal.

(3.)BEFORE we take up the question under reference, we may notice another aspect of the case which perhaps escaped attention. On a previous occasion, the applicants and their uncle Balkishan claimed that, upon the dissolution of the firm Balkishan Ramkishan Nathani on 31 December 1938, the business carried on by that firm was discontinued and thereafter each of the two brothers, Balkishan and Ramkishan, carried on the business which fell to his share separately. It was than held that there was succession, though it took place prior to the commencement of the Amending Act of 1989, and no discontinuance because the various branches were independent and neither the identity nor the integrity of any branch was impaired by the change in ownership, each branch having been taken over as a going concern: Income -tax Appellate Tribunal vs. Bachraj Nathani : (1946) 14 ITR 191. If that was the true position, it would be readily seen that the 4 new branches did not exist before 31 December 1938, that no tax was charged on the business carried on in those branches under the 1918 Act and that the relief claimed is therefore not available in respect of such business. It is, however, urged that there hat always been only one business and that the 4 new branches constitute merely a development or extension of that business. In our opinion, the claim for relief is unsustainable even on that footing. It would appear that, in year 1939, this business was divided between two partners, Balkishan and Ramkishan. Then, following the dissolution of the partnership of the four applicants on 21 July 1948, the business was further divided amongst them with the result that each applicant now has, broadly speaking, about one eighth part of the business carried on when the 1918 Act was in force and developed subsequently. There can be no succession to a business unless it devolves as a whole and substantially retains its identity and integrity. For example, when a business is split up and thereafter another person carried on part of the business, he does not succeed his predecessor in carrying on that business: Commissioner of Income -tax Burma vs. N. N. Firm, (1934) 2 ITR 85 F. B., Commissioner of Income -tax, Burma vs. A. L. V. R. P. Firm, (1940) 8 ITR 531 S. B., Jittanram Nirmalram vs. Commissioner of Income -tax : (1953) 23 ITR 288 and Kaniram Ganpatrai vs. Commissioner of Income tax, Bihar and Orissa : (1953) 23 ITR 314, Having regard to the authorities bearing on the point, there was, in this case, no succession and the applicants are disentitled to the relief under Section 25 (4) of the Act. In this view, the question under reference ceases to be of any practical importance.