COMMISSIONER OF INCOME TAX Vs. RAMA TRANSPORT CO

JUDGEMENT

(1.) The present reference under Section 256(1) of the I.T. Act, 1961, relates to the assessment years 1968-69 and 1969-70. The assessee-firm was reconstituted by a deed of partnership dated May 20, 1967, w.e.f. April 1, 1967, by introducing a new partner, Sri K. K. Nijhewan. Prior to the reconstitution, there were two partners, Sri Basheshar Lal and Smt. Gayanwanti Devi, having equal shares and the firm had been allowed registration. The business of the firm was of road transport. Material clauses of the reconstituted partnership deed are as follows:

(2.) The ITO made the assessments of the assessee-firm under Section 143 of the I.T. Act, with which we have got no concern in the present reference. He, however, passed a separate order for registration for the assessment year 1968-69. He considered the terms of the partnership deed and examined the partners, Sri K. K. Nijhewan and Smt. Gavanwanti Devi, and came to the conclusion that the firm was not a genuine one. The ITO, therefore, rejected the assessee's claim for registration for the assessment year 1968-69. He also refused the continuation of registration for the assessment year 1969-70.

(3.) The assessee came in appeal before the AAC who held that the conditions for a valid 'partnership and registration thereof were satisfied. He further directed the ITO to allow registration to the assessee for the assessment year 1968-69, and renewal of registration for the assessment year 1969-70.