COMMISSIONER OF INCOME TAX Vs. HOTEL SRIRAJ

JUDGEMENT

(1.) THE question referred to us under the provisions of the Income-tax Act, 1961, reads as follows :

(2.) THE assessee claimed the status of a firm and filed the returns accordingly. THE claim of the assessee was rejected by the Income-tax Officer on the ground that the number of partners, who constituted the partnership firm, exceeded 20 and, therefore, the partnership cannot be recognised as such and, accordingly, treated the assessee as an association of persons. THE assessee questioned this, contending that the number of persons/who constituted the firm were below twenty excluding the minors who were admitted only to the benefits of the partnership as per section 30 of the Indian Partnership Act. This contention of the assessee was accepted by the Appellate Assistant Commissioner and, accordingly, the appeal filed by the assessee was allowed. THE Appellate Tribunal affirmed this view. Hence, this reference at the instance of the Revenue.

(3.) CONSEQUENTLY, the question referred to us is answered in the affirmative and against the Revenue.