1. By this application, the assessee requires the Appellate Tribunal to refer to the High Court one question of law, which is said to arise out of the Tribunal's order in I. T. A. No. 2277 of 1953-54. Inasmuch as in our opinion, a question of law does arise out of the aforesaid order, we hereby draw up a statement of the case agreed to by the parties and refer it to the High Court of Judicature at Bombay under section 66(1) of the Indian Income-tax Act.
2. The assessee, Bhogilal Laherchand, was partner in a firm doing business in jewellery and precious stones in the name of Bhogilal Laherchand and in machinery in the name of Batliboi & Company with effect from 17th March, 1942. Two minor sons of the assessee namely, Arvind and Mahesh, were admitted to the benefits of this partnership. A copy of the partnership deed dated 14th April, 1943, is annexure 'A' and forms part of the case. The minor son, Arvind, attained majority on 22nd August, 1950. He elected to become a partner in the firm. No public notice was given of his election to become a partner. A fresh partnership deed was, however, executed on 28th August, 1950. A copy of this fresh partnership deed is annexure 'B' and forms part of the case. Arvind died on 31st August, 1950, in an air crash.
3. The accounts of the firm are closed at the Diwali time. The year of account of the firm is thus the samvat year. The profits of the firm for S. Y. 2006 were determined at a certain figure. On a proportionate basis the profits of the firm up to 31st August, 1950, were determined and allocated. The share in the profits of the firm that fell to Arvind up to 31st August, 1950, was computed at Rs. 2,64,450. On a proportionate basis the share in the profit up to 22nd August, 1950, was computed at Rs. 2,49,459. The figure is not in dispute if the answer to the question of law raised is against the assessee. While making the assessment on the assessee for the year 1951-52, the year of account being SY. 2006, the Income-tax Officer included the sum of Rs. 2,49,459 in the assessee's total income under section 16(3) (a) (ii) of the Act.
4. On appeal before the Appellate Tribunal, it was contended on behalf of the assessee that this sum of Rs. 2,49,459 was not liable to be included in the assessee's income. This contention was not accepted by the Appellate Tribunal for the reasons recorded by it in its order, a copy of which is annexure 'C' and forms part of the case.
5. The only question of law that therefore arises is :
'Whether the sum of Rs. 2,49,459 could legally be included in the assessee's total income of S. Y. 2006 liable to be assessed in the assessment year 1951-52, '
N. A. Palkhivala, for the assessee.
The Advocate-General and G. N. Joshi, for the Commissioner.