COMMISSIONER OF INCOME TAX Vs. MAHENDRA KUMAR SETHIYA

JUDGEMENT

(1.) THIS is an application filed by the applicant, namely, the CIT, M. P., Bhopal, under S. 256(2) of the INCOME TAX ACT, 1961, for calling upon the Tribunal, Indore Bench, Indore, to submit the statement of the case and refer to this Court for its opinion the following question of law:

(2.) THE facts giving rise to this petition may be stated, in brief, thus: Mahendra Kumar Sethiya of Ujjain, which is a partnership firm, consisted of two partners. On February 18, 1981, a fresh deed of partnership was executed by admitting two more partners, one of whom was the brother of the partners and another was the mother of the partners. Their application for registration of the firm was rejected by the ITO as also by the Appellate Authority on the ground that they have failed to prove that the new partners contributed any capital to the new partnership firm or that they carried on any actual business on behalf of the firm. On an appeal being filed by the assessee, the Tribunal negatived the contentions of the Department and thus directed the ITO to grant registration. An application filed by the petitioner under s.256(1) of the IT Act, 1961, was rejected by the Tribunal. Hence this application. Learned counsel for the applicant submitted that as the new partners, namely, Yogesh Kumar, being a college student, and Smt. Kanta Devi, being the mother of the partners, in their statements have failed to prove that in fact they have been acting as partners and thus the genuineness of the firm being doubtful, the Tribunal has committed an error in upsetting the finding on this point of the lower Courts.

(3.) HOWEVER , after hearing the learned counsel and after going through the case law cited, we are of opinion that the Tribunal has considered the legal position as also the evidence adduced in proper perspective. Therefore, the question referred being purely a question of fact, in our opinion, it is not necessary to call upon the Tribunal to make a reference as urged on behalf of the petitioner though learned counsel for the petitioner also tried to contend that this is a mixed question of law and fact.