(1.) THIS is a reference under Section 66 of the Indian Income Tax Act.
(2.) SIR Sobha Singh and his four sons S. Bhagwant Singh, S. Khushwant Singh. Major gurbakhsh Singh and S. Daljit Singh were members of a Hindu undivided family up to 31-3-1947 when by mutual consent they became divided in status inter se and agreed to divide their joint family properties. As the total assets of the Hindu undivided family valued at Rs. 45,36,756/- and as the debts outstanding against the said Hindu undivided family aggregated to rs. 1,7,32,391/11/6 and as the net value after deducting the total liabilities from the total assets was Rs. 28,04,364/- it was agreed that Sir Sobha Singh shall be separate owner of property of the value of Rs. 5,64,364/-and that each of his four sons shall be separate owner of property of the value of Rs. 5,60,000/ -. The property which fell to the share of S. Bhagwant Singh was as follows : 1. Half share in Regal Building valued Rs. 8,00,000 2. Kothi No. 7 Prithviraj Road, new Delhi, valued at. Rs. 1,40,000 total. . . Rs. 9,40,000 less debts to be paid by him falling to his share amounting to. Rs. 3,80. 000 net value falling to his snare. Rs. 5,60,000 a formal deed of partition relating to the movable and immovable properties, securities, assets and liabilities was executed on 9-6-1947.
(3.) IN November 1947 S. Bhagwant Singh sold the property known as No. 7, Prithviraj Road, new Delhi, for a sum of Rs. 6,00,000/-, and invested a part of the proceeds thereof (over Rs. 1,50,000/-) as his capital contribution in a new partnership concern known as Sir Sobha Singh and Company (Builders), Nagpur, which was constituted on 11-12-1947. He was to have a-/6/-anna share in the partnership business and was to be paid a sum of Rs. 1500/- per mensem as his remuneration.