Shiv Dayal, C.J. - (1.) THIS is a reference under Section 66(2) of the Indian Income-tax Act, 1922. The questions are: "(1) Whether there was evidence for the Tribunal to come to the conclusion that there was no ascertainment of the capital assets of the business on October 23, 1957, and there was, therefore, no partial partition on October 23, 1957? (2) Whether, on the finding that there was no ascertainment of the capital assets on October 23, 1957, the Tribunal was justified in its further conclusion that no partnership was brought into existence on October 23, 1957, so as to entitle it for registration under Section 26A of the Indian Income-tax Act, 1922 ?"
(2.) THE assessment years are 1959-60 and 1960-61, the relevant previous years being the years ending Diwali 1958 and 1959 respectively. Ghewarchand, his wife, Shrimati Gajrabai, and his two sons, Meghraj and Kewalchand, formed a Hindu undivided family. The firm carried on ghee business under the name and style of M/s. Ghewarchand Kewalchand. Until, and inclusive of the assessment year 1958-59, the income from the said ghee business was assessed to tax in the hands of the Hindu undivided family. On October 23, 1957, which was the last day of the accounting year (assessment year 1958-59), the Hindu undivided family claimed to have effected a partial partition in respect of the said ghee business, and to have formed a partnership under the name and style of Ghewarchand Kewalchand consisting of the following partners who were to share equally profit or loss, as the case may be : (1) Ghewarchand, s/o Pratapchand, 5 annas and 4 pies in a rupee, (2) Kewalchand, s/o Ghewarchand, 5 annas and 4 pies in a rupee. (3) Meghraj, s/o Ghewarchand, 5 annas and 4 pies in a rupee.
(3.) IN consequence of this, the newly formed firm, M/s. Ghewarchand Kewalchand, by, an application dated June 26, 1958, under Section 26A of the INdian INcome-tax Act, 1922, applied for registration of the firm for the year 1959-60 and for continuance of the registration for the year 1960-61. The terms of the partnership were recorded in an instrument of partition dated October 26, 1957.;