COMMISSIONER OF INCOME TAX Vs. NAGAPPA ABDULPURKAR

JUDGEMENT

(1.) THE assessee firm of M/s. Nagappa Abdulpurkar was constituted by Gangappa Abdulpurkar with himself and his two wives as partners. A minor son was also admitted to the benefit of the partnership. This firm was said to have been constituted in the asst. yr. 1960-61. According to the ITO the firm was not a genuine firm and was entitled to registration. For the asst. yr. 160-61 the ITO assessed its income as in the hands of Gangappa Abdulpurkar. THE assessments in the firm's as well as the partners's case upheld by the AAC. However, in appeal before the Tribunal, the Tribunal held that M/s Nagappa Abdulpurkar was a genuine firm and was entitled to registration. THE Tribunal accordingly directed the ITO to grant registration to the said firm and consequently to include in the assessment of the partner Gangappa Abdulpurkar, has share of the profits of the firm and not the entire income of the firm. From this decision of the Tribunal a reference was made earlier to this court at the instance of the department u/s 256(1) of the IT Act. THE present reference pertains to the same firm and the same partner, but for the asst. yrs. 1961-62 to 1967-68. THE same questions which were raised in the earlier reference are also raised in the present reference. THEse questions are :

(2.) THE earlier reference has been decided by a Division Bench of this Court in favour of the assessee under a judgment in the case of CIT, Poona v. Nagappa Abdulpurkar 1978 CTR (Bom) 365 : (1978) 114 375 (Bom). THE Court has held that in view of the finding of the Tribunal that the partnership was valid and genuine the firm was entitled to registration under the provisions of the IT Act. In the present case the factual position remains the same for the subsequent assessment years and there has not been any change of circumstances. Accordingly in respect of the assessment years covered by this reference also, the questions will have to be answered in favour of the assessees. Both the questions are answered in the negative that is to say in favour of the assessee and against the department. THEre will be no order as to costs.