COMMISSIONER OF INCOME TAX Vs. CRAWFORD BAYLEY AND CO

JUDGEMENT

(1.) THE question that has been referred for our determination at the instance of the revenue is as under :

(2.) THE question relates to the assessment years 1959 -60 to 1963 -64, the relevant previous years being the financial years preceding the assessment years. From April 1, 1957, the constitution of the firm of Messrs. Crawford Bayley and Co. (the assessee) was governed by a partnership deed dated March 14, 1957 (which in the question is referred to as annexure 'A'). Under this deed of partnership one of the partners of the firm was Mr. V. R. Nath. He died on May 27, 1958. After his death a new deed of partnership was executed on April 16, 1959, and it was to take effect from April 1, 1959. This deed of partnership is referred to as annexure 'B' in the question. Mr. D. T. Lawrie who was a partner of this firm died on July 16, 1959. After his death a supplementary deed came to be executed on April 29, 1960 (which is referred to in the question as annexure 'C').

(3.) FROM June 1, 1958, to August 31, 1959, a total payment of Rs. 3,000 was made to Mrs. Nath at the rate of Rs. 300 per month and this sum or Rs. 3,000 is claimed as deduction in the assessment year 1959 -60. Thereafter, each year payment at the rate of Rs. 300 per month came to be made to her and the said amounts are claimed as deductions in the later assessment years.