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JUDGMENT Banerjee, J.-Under an order of this court, a statement of case on the following question of law was made by the Appellate Tribunal: "Whether, on the facts and in the circumstances of the case, the findings of the Tribunal that the gifts alleged to have been made by the assessee to his brother, Brijlal Lohia, and his nephew, Nandkishore Lohia, were validly made and that the business of Brijlal Nandkishore did not belong to the assessees were perverse in the sense that no reasonable man would come to the findings on the material on record?" Facts, in so far as necessary for answering the question, are hereinafter stated in brief. The assessee, Kanailal Lohia (alias Kanhaiyalal Lohia), now deceased, used to be assessed as an individual. His estate is represented before us ,by the executors of his will, namely, Brijlal Lohia and Mahabir Prosad Khemka. On July 12, 1943, the assessee, Kanailal Lohia, gave Rs. 5,11,101 to his brother Brijlal Lohia, by way of gift. Out of the above sum, an amount of Rs. 5,00,000 was paid by cheque and the balance was paid in cash. Similarly, on September 30, 1943, the assessee gave Rs. 2,50,000 to his nephew, Nandkishore Lohia, son of Brijlal Lohia, by way of gift. Thereafter, Brijlal Lohia and Nand Kishore Lohia started a partnership business, some time in August 1943, under a partnership deed dated August 8, 1943, the firm name being Brijlal Nandkishore. In the said partnership, they invested the money received by them from the assessee. The firm, Brijlal Nandkishore, was granted registration under the provisions of section 26A of the Income-tax Act, 1922, because the Income-tax Officer found no reason to doubt the genuineness and the reality of the firm. This partnership used to carry on business in jute, jute baling and shipping, being the same business which the assessee used to carry on. For the assessment years 1945-46 and 1946-47, the Income-tax Officer had assessed the assessee to tax. Thereafter, proceedings under section 34 of the Indian Income-tax Act, 1922, were taken against the assessee because the Income-tax Officer, Non-companies E.P.T. District, felt that the income earned by the firm, Brijlal Nandkishore,…

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