TAMBE AND SONS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE question that has been referred for our determination is:

(2.) BY an indenture of partnership dated March 18, 1960, four persons, namely, S. V. Tambe, S. S. Tambe, V. S. Tambe, and D. S. Tambe, entered into an agreement to carry on restaurant business and agreed to share the profits thereof respectively, at the ratio of 22 nPs., 34 nPs., 22 nPs. and 22 nPs. Under cl. 2 of the partnership deed the partnership was to commence w.e.f. January 1, 1960. Under cl. 7 thereof the accounting year was to be the calendar year or any other year as might be decided from time to time. In actual practice, the accounts were kept on calendar year basis. Under cl. 9 thereof the partnership was to be a partnership at will. Clause 11 of the partnership deed is as under :

(3.) FOR the asst. year 1961 62, the ITO allowed initial registration passing the following order: