COMMISSIONER OF INCOME TAX Vs. MOOSA A M

JUDGEMENT

(1.) THE application of the petitioner under Section 256(1) of the Income-tax Act, 1961, for a reference of a question of law arising out of the order of the Tribunal was rejected by the Income-tax Appellate Tribunal by its order in R. A. No. 239/(Coch) of 1985. THE Commissioner of Income-tax who is aggrieved by that order urges that a question of law arises out of the order of the Tribunal and that it ought to be referred under Section 256 of the Act.

(2.) THE question relates to the assessment of the income of A. M. Moosa, the respondent, who was a partner in the business establishment known by the name M/s. Bharath Sea Foods. On December 1, 1975, by a deed of dissolution, K. S. Mohammed and Smt. M.L. Karthikai Kumari retired from the partnership business. THE partnership deed records that, as from the date of dissolution and upon the retirement of the two partners, "the partnership business of M/s. Bharath Sea Foods stands dissolved and shall always been deemed to have been dissolved." THE contract between the parties consists of mutual promises. THE retiring partners handed over the assets and liabilities of the business to the continuing partner, Moosa, in consideration of which Moosa agreed to render monthly accounts upon realisation of the assets. Under Clause (3), all the assets and liabilities of the business of M/s. Bharath Sea Foods except those reserved under Clause (7) were taken over by Moosa as absolute and full owner. THEre is no reference in the deed of dissolution to the status of the business after the date of dissolution which may lead to an inference that Moosa took over the running business of the firm. .