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Section 31 of the Indian Income-tax Act, 1922 - Appellate Assistant Commissioner - Appeal to CASE REVIEW Trustees of Sir Currimbhoy Ebrahim Baronetcy Trust v. CIT [1934] 61 I.A. 209; 2 ITR 148 (PC) followed and relied upon. CASES REFERRED TO Lydney and Wigpool Iron Ore Co. v. Bird [1886] 33 Ch D 85, LadyWell Mining Co. v. Brookes [1886] 34 CH D 398, LadyWell Mining Co. v.Huggons [1897] 35 Ch D 400, Ominium Electric Palaces Ltd. v.Baines [1914] 1 Ch 332, Williams v. Singer [1920] 7 TC 387, CIT v.Trustees of Sir Currimbhoy Ebrahim Baronetcy AIR 1932 Bom. 106. JUDGMENT Malik, CJ.-This is a reference under Section 66 (1) of the Indian Income-tax Act. Two questions have been referred to us, one at the instance of the Commissioner of Income-tax and the other at the instance of the assessee. The questions referred for decision are : "1. Whether in the circumstances of the case the Appellate Assistant Commissioner was empowered under the law to cancel the assessment and whether the order in appeal passed by the Appellate Assistant Commissioner was within the ambit of his powers under Section 31, Income-tax Act ? 2. Whether in the circumstances of the case the income of the period from nth December, 1942, to 10th December, 19431 could be legally assessed in the hands of the assessee company which was incorporated on nth December, 1943 ?" The facts found in the appellate order of the Income-tax Tribunal and which are stated in the statement of the case are that Messrs. David Mills Ltd. were previous owners of the Bijli Cotton Mills at Hathras. Messrs. Shyamlal Chimarilal, a partnership firm, thought of acquiring the Bijli Cotton Mills for a sum of Rs. 15 lacs on behalf of a company, which they were going to get incorporated. Messrs. Shyamlal Chimanlal paid the stipulated price to Messrs. David Mills Ltd., purporting to do so on behalf of the company which they were going to float. On 10th December, 1942, they obtained possession of the Bijli Cotton Mills as representing the purchaser company which had not yet come into existence but which they specifically mentioned they had decided to get incorporated. On nth December, 1943, the company was duly incorporated and on the…

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