KYLASA SARABHAIAH Vs. COMMISSIONER OF INCOME TAX HYDERABAD

JUDGEMENT

(1.) THE following Judgment of the court was delivered by:

(2.) THE appellants who are a firmcarrying on business in cloth at Secunderabad<PG>1412</PG>applied on 30/06/1955, for registration underS.26A of the Indian income-tax Act, 1922, forthe assessment year 1956-57. THE followingpersons were, it was recited in the application.partncts having share in the profits and lossesin proportions specifid against their names:- <FRM>JUDGEMENT_1411_AIR(SC)_1965Html1.htm</FRM> For facility of reference we will call No 1 'theyarn shop'.

(3.) REGISTRATION of the firm may be obtained on an applicationto the Income-tax Officer on behalf of any firm, if the firmbe lawfully constituted under an instrument of partnershipwhich specifies the individual shares of partners and theIncome-tax Officer is satisfied that there is or was agenuine firm in existence as shown in the instrument. Ifthe conditions are fulfilled, the income-tax Officer has nopower to reject the application. Undoubtedly, theapplication must strictly be in conformity with the Act andthe Rules, but in ascertaining whether the application is inconformity with the Rules, the deed of partnership must bereasonably construed.