INDIAN NATIONAL TANNERY Vs. STATE OF U P

JUDGEMENT

(1.) THIS a reference under Section 66(2) of the Income-tax Act (XI of 1922) by the Commissioner of Income-tax, Central and United Provinces.

(2.) THE assessee is a firm known as the Indian National Tannery of Cawnpore. For the assessment year 1936-37 the firm returned an income of Rs. 28,722. THE books of account belonging to the firm were examined and they disclosed that since the previous year there had been an increase in the firms capital to the extent of Rs. 1,08,771, which represented money due respectively to eight traders who had supplied bark to the firm. THE books showed this sum of Rs. 1,08,771 had been transferred partly to the reserve fund and partly to the personal accounts of the three partners, Mohammad Hamza, Mohammad Nazir and Mohammad Bashir, as follows :-