COMMISSIONER OF INCOME TAX PUNJAB HIMACHAL PRADESH JAMMU AND KASHMIR AND SIMLA Vs. CHANDER BHAN HARBHAJAN LAL

JUDGEMENT

(1.) This appeal by special leave is from an order of the Punjab High Court rejecting an application by the Commissioner of Income-tax, Punjab, under S. 66(2) of the Indian Income-tax Act, 1922. On April 21, 1953, 14 partners of the firm of Messrs. Chander Bhan Harbhajan Lal of Rupar (hereinafter referred to as the assessee firm) constituted under the instrument of partnership, dated December 5, 1952, applied to the Income-tax Officer, Project Circle, Ambala, for registration of the firm under S. 26-A of the Indian Income-tax Act. It may be mentioned at this stage that there was another firm of the name of Chander Bhan and Co., of Ferozepore (hereinafter referred to as the Ferozepore firm), consisting of 8 partners and constituted under a deed, dated June 14, 1952 which provided inter alia :

(2.) One Gosain Chander Bhan was a partner of both the assessee firm and the Ferozepore firm. In course of proceedings arising out of the application for registration of the asseessee firm under S. 26-A, Harbhajan Lal, one of its partners, stated on January 30, 1954:

(3.) The capital of the assessee firm was supplied by Gosain Chander Bhan. It appears that Gosain Chander Bhan had taken the capital from the Ferozepore firm, and the amount was shown as an item in his accounts with the Fezorepore firm.