NARAIN AUTOMOBILES Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The Tribunal has referred the following question under Section 256(2) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), for the opinion of this Court relating to the assessment year 1997-98 : "Whether, on the facts and circumstances of the case, M/s. Narain Automobiles was entitled to registration under Section 185 of the Income-tax Act, 1961 for the assessment year 1997-98 ?"

(2.) The brief facts of the case are as follows :

(3.) The applicant/assessee (hereinafter referred to as "the assessee"), was assessed in the status of a registered firm for the last several years but the first change in the constitution of the firm took place in the assessment year 1971-72 when one of the partners, namely, Vinod Narain, retired and in his place his two minor daughters, namely, Kum. Vineeta Narain and Kum. Smita Narain, were admitted to the partnership with equal shares of 12% per cent. The newly constituted firm continued till the accounting year relevant to the year 1977-78. In the assessment year 1976-77, the shares of the major partners was reduced from 25 per cent, to 15 per cent, and one new partner, Rajeev Narain, was admitted and the shares of the aforesaid two minors was increased from 121/2 per cent, to 171/2 per cent. In the same year, another change was took place with effect from April 1, 1976, and the result was that the two minor daughters having 171/2. per cent, retired from the firm and in their place their mother, namely, Rita Narain was admitted. Five partners were allowed in the new partnership deed.