1. One C. N. Caroe was a partner in a firm of solicitors, M/s. Craigie Blunt and Caroe. This firm was dissolved on September 23, 1953, and the business carried on by the firm was taken over by another firm in which Mr. Caroe became a partner. This new firm was M/s. Mulla and Mulla and Craigie Blunt and Caroe. Mr. Caroe died on September 9, 1954. The accounting year followed by the old as well as the new firm was the financial year. The accounts of both firms were kept on cash basis.
2. For the assessment year 1954-55 Mr. Caroe had filed a return. For 1955-56 W.E.N. Butcher, executor, of the will of Mr. Caroe, filed two returns, one in respect of income for the period April 1, 1954, to September 9, 1954, and the other for the period September 10, 1954, to March 31, 1955. The ITO, in due course, completed the assessments in respect of the first return under s. 23(3) read with s. 24B and in respect of the other, directly by Butcher, under s. 23(3) of the I.T. Act, 1961. In the assessment for the first period he included Rs. 22,231 as the deceased's share from M/s. Craigie Blunt and Caroe and Rs. 11,117 as share from M/s. Mulla and Mulla and Craigie Blunt and Caroe. In the assessment for the second period he included Rs. 28,231 as share of profit from M/s. Mulla and Mulla and Craigie Blunt and Caroe.
3. In appeal, the AAC was of the opinion that in view of the observations to be found in the decision of the Supreme Court in CIT v. Amarchand N. Shroff : 48ITR59(SC) , the share of profits received for the period after his death should not be assessed separately in the hands of the executor but should be included along with income of the period prior to the death of the deceased in a single assessment. Accordingly, the AAC enhanced the assessment made on Mr. Butcher under s. 24B by including the sum of Rs. 28,231 also. The assessee thereafter appealed to the Tribunal. The Tribunal considered the decision of the Supreme Court and allowed the appeal, holding that the AAC was not right in including in the assessment made under s. 24B of the I.T. Act, 1961, the receipts after the death but in respect of the work done by the deceased before his death. The Tribunal expressed no opinion on the question whether the amount in respect of the work done prior to the death of the assessee but paid to the legal representative after his death could be considered to be income. It is from the order of the Tribunal that the following question of law arose and stands referred to us by the Tribunal :
'Whether, on the facts and in the circumstances of the case, the sum of Rs. 28,231 was liable to be included in the total income of the assessee under the provisions of the Indian Income-tax Act, 1922 ?'
4. It would appear to us that the answer to be given to this question is now concluded against the Department by the decision of this court in Arvind Bhogilal v. CIT : 105ITR764(Bom) . After considering the decision of the Supreme Court in Amarchand's case : 48ITR59(SC) in extenso and after understanding the same with reference to the material brought on record in the said case, the Bench answered the question referred to it in favour of the assessee. It held, on the facts of that case, that the sum of Rs. 2,61,821 derived from the firm of M/s. Bhogilal Laherchand did not accrue to Arvind at any time on or before August 31, 1950 (the date of his death) and s. 24B of the Indian I.T. Act, 1922, was not attracted.
5. Applying the law laid down in : 105ITR764(Bom) , we answer the question referred to us in the negative and in favour of the assessee. Parties to bear their own costs of the reference.