COMMISSIONER OF INCOME TAX Vs. NAGAPPA ABDULPURKAR

JUDGEMENT

(1.) THE question referred to us under S. 66(1) of the Indian IT Act, 1922, is as follows :

(2.) IN this reference, we are concerned with the deed of partnership dated 1st September, 1959, annexure "A" to the statement of case, together with a deed of amendment called deed of agreement dated 30th October, 1959, annexure "B" to the statement of case. On the basis of these deeds the registration was claimed for the firm. The ITO refused registration as according to him the deeds did not bring about any relation of partners among the parties to the deeds and there was no intention to act upon the terms of the same. The AAC upheld the decision of the ITO. The assessee then took up the matter in appeal to the Tribunal. The Tribunal considered the circumstances under which the partnership was formed. It applied its mind to the factors which had weighed with the ITO and the AAC in their conclusions. It considered the decision of the Madhya Pradesh High Court in the case of Murlidhar Kishangopal vs. CIT, [1963] 50 ITR 628 (MP) and, applying the principles enunciated therein, the Tribunal held that, on the facts and, circumstances of the case, there was a valid partnership formed expressly in the manner it has been done in consonance with the provisions of the Indian Partnership Act, 1932, and further that the said partnership was a genuine one.

(3.) IN the result, the question referred to us is answered in the affirmative and in favour of the assessee. The parties, however, will bear their own costs of the reference.