JER AND CO Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS a statement of a case submitted by the Income-tax Appellate Tribunal, Bombay Bench "A", at the instance of the Commissioner of Income-tax, U.P., inviting this court to answer the following question :

(2.) THE previous years relevant to the assessment years 1958-59 and 1959-60 are financial years April 1, 1957 -March 31, 1958 and April 1, 1958 - March 31, 1959. THE assessee is a partnership constituted on July 21, 1945, of two partners (1) Dady and (2) Minoo, who are brothers. THE partners had been carrying on wholesale business in wines under the name and style of Jer and Company at Agra since October 1, 1944, but the partnership was constituted by a written document on July 21, 1945. THE material terms of the deed of partnership are as follows :

(3.) DADY held the licence during the two assessment years also but the business of wholesale vending of foreign liquor at Agra was done by the partnership under the name and style of Jer and Company and not by DADY. Jer and Company had engaged an authorized salesman named Mohammad Ismail to do the actual vending. Jer and Company never obtained a licence from the Excise Commissioner for the wholesale vending of foreign liquor. The partnership was registered under section 26A of the Income-tax Act in 1945-46 and the registration was renewed from year to year up to end of the assessment year 1950-60. The registration was renewed for the assessment year 1958-59 on September 8, 1958, and for the assessment year 1959-60 on July 10, 1959. On September 3, 1960, the Commissioner of Income-tax acting under section 33a of the Income-tax Act cancelled the renewal for the two assessment years after the necessary formalities because in his opinion the object of the partnership was illegal, it being to carry on the business of selling foreign liquor contrary to the rules framed by the Government under the Excise Act. The partnership filed an appeal which was allowed by the Tribunal. The gist of its findings is given below :