Suhas Chandra Sen, J. - (1.)The Tribunal has referred the following question of law to this court under Section 256(1) of the Income-tax Act, 1961 ("the Act"):
"Whether, on the facts and in the circumstances of the instant case, the Tribunal was justified in holding that the share of profit in the firm of Paris Dress Makers cannot be said to have arisen to the wife from the transfer of the assessee's 1/4th share in the assets of the partnership business to her, and in that view deleting the inclusion of Rs. 17,165 in the assessee's total income under Section 64(1)(iii) of the Income-tax Act, 1961."

(2.)In this case, the assessment year involved is 1974-75 for which the relevant accounting year is the year ending on March 31, 1974.
(3.)The facts found by the Tribunal as contained in the statement of case are as under : The assessee was the owner of the property at No. 97, Golf Links, New Delhi, and he himself and his sons were partners of a firm styled as Paris Dress Makers carrying on business at Calcutta, the share of the assessee in that partnership business being one-fourth. By a gift deed dated January 30, 1973, the assessee gifted his property at No. 97, Golf Links, and also his one-fourth interest in Paris Dress Makers to his wife, Smt. Sushil Kaur. By another deed dated February 16, 1973, the firm styled as Paris Dress Makers was reconstituted in the sense that the assessee retired from the partnership and in his place his wife to whom the assessee had already gifted his one-fourth interest was inducted as a partner of the firm. It was stipulated in that document that the assets and liabilities of the retiring partner (assessee) shall absolutely belong to the newly inducted partner (assessee's wife) and the latter was under no obligation to contribute any further capital, though she might do so at her option.