KYLASA SARABHAIAH Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference under S. 66, cl. (1), of the Indian IT Act (XI of 1922). The question referred to for decision is : 'Whether, on the facts and circumstances of the case, the assessee is entitled to registration under S. 26A of the IT Act ?" The facts leading up to this reference are as follows : The assessee filed an application on 30th June, 1955, before the ITO, C Ward, Hyderabad, for renewal of the registration under S. 26A of the Indian IT Act (hereinafter referred to as the Act). As per the application, the following were shown as the partners :

(2.) THE application was signed by K. Veeresalingam, K. Nagendra Rao, K. Sathaiah and V. Narayana. The assessment year was 1955 56 and the accounting year for the relevant assessment year was from 7th Nov., 1953, to 26th Oct., 1954. The deed of partnership on which reliance was placed for the purpose of registration under the Indian IT Act was dated 12th Dec., 1953. The ITO the application. On appeal, the order of the ITO was confirmed by the AAC which in its turn was confirmed by the Tribunal, Hyderabad Bench. On an application filed by the assessee to the High Court, the Tribunal referred the above question for decision. The material portions of the deed of partnership dated 12th Dec., 1953, on the basis of which the renewal of the registration is prayed for are as follows :

(3.) THE instrument of partnership referred to in this deed is executed by Kylasa Veereslingam and Kylasa Nagendra Rao. Under this deed, five minors are admitted to the benefits of the partnership evidenced by the deed of partnership dated 20th Feb., 1952. It was also recorded in that deed that each of them was entitled to an equal share in the profits which comes to 1/7th share in the profits. But in the deed of partnership dt. 12th Dec., 1953, which is the partnership in question in this case, the shares of Kyalsa Veeresalingam and Kylasa Nagendra Rao are shown to be equal and to amount to a nine annas' share in all.