COMMISSIONER OF INCOME TAX Vs. KUNHAMMED C M

JUDGEMENT

(1.) THIS is a reference under Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as " the Act"), at the instance of the Commissioner of Income-tax, Ernakulam. The questions referred are :

(2.) THE assessment years are 1960-61 and 1961-62 and the relative accounting periods are those that ended on the 31st July, 1959, and the 31st July, 1960, respectively. THE assessee, an individual, had been carrying on business as timber merchant and was also running a saw mill under the style " THE Seeyan Saw Mills". On the 1st August, 1960, he formed a partnership with his wife and his manager as partners. This is evidenced by a deed dated 1st August, 1960, which is annexure " D ". THE business was thereafter carried on by the firm.

(3.) THE Tribunal accepted both these contentions and held that Section 35(11) would apply and that there had been no transfer as envisaged by Section 35(11)(i) of the 1922 Act and hence allowed the appeal by its order which is annexure "E".