COMMISSIONER OF INCOME-TAX Vs. D P KANODIA

JUDGEMENT

(1.) Under Section 256(1) of the Income-tax Act, 1061, the Tribunal has stated the following question at the instance of Revenue :

(2.) At the instance of the assessee, the Tribunal has referred another question which reads :

(3.) Lala Ganga Prasad Kanodia, Brij Mohan Kanodia and Devi Prasad Kanodia, three brothers, constituted a undivided Hindu family. They were carrying on business in the name and style of Sadiram Ganga Prasad. The business comprised several business/industrial units. On December 29, 1956, the three brothers decided to put to an end to the Hindu undivided family. The capital of the family in the aforesaid business on the said date was a negative figure. This negative capital was divided amongst the three brothers equally. On the same day, a new partnership firm was formed, evidenced by a deed of partnership dated December 30, 1956. This deed recited that