SUNIL KRISHNA PAUL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) : In this reference under s. 66(1) of the IT Act, 1922 (hereinafter called the Act), the following question of law has been referred to this Court for its opinion :

(2.) THE facts which gave rise to the above question are briefly stated as follows : Anil Krishna Paul and Jogendra Nath Nandi had acquired a right of receiving commission of 1per cent on sales from M/s Annapurna Cotton Mills. THE said Jogendra Nath Nandi died on the 7th June, 1950. Along with Anil Krishna Paul, he entered into an agreement dated 26th January, 1950. THE benefits of the agreement were transferred in favour of the applicants, Sunil Krishna Paul and Amar Krishna Poddar, by a deed of assignment dated 10th December, 1951, executed by Anil Krishna Paul and the legal heirs of Jogendra Nath Nandi. On the 9th of August, 1954, the assignees, Sunil Krishna Paul and Amar Krishna Poddar, entered into a partnership to share the commission receipts and the instrument of partnership was executed on the said date. It was alleged by the applicants that they carried on the business of partnership by employing staff in order to verify the correctness of the sales of the company. Such expenses at the time of assessment were allowed as deductions by the Department.

(3.) MR. Subimal Roy, learned counsel appearing for the applicants, raised various points attacking the decision of the Tribunal. Before dealing with the details of his argument, it is necessary to set out the relevant provisions of the instrument of partnership dated the 9th August, 1954. The