PREMSUKH GANESHMULL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) This is a reference under Section 66(1) of the Indian Income-tax Act, 1922, and the question is as follows ;

(2.) The reference relates to the assessment year 1960-61, and it arises out of the registration proceedings under Section 26A of the Indian Income-tax Act, 1922. The assessee is a firm constituted under a deed of partnership dated April 28, 1959. The minor sons of a deceased partner, namely, Hiralal Chhajer, were admitted to the benefits of this partnership and they were given l/10th share of profits of the firm. The Income-tax Officer refused registration, for, according to him, the individual shares of those minors are not specified in this partnership deed. The Appellate Assistant Commissioner allowed the appeal filed by the assessee, on the ground that in the absence of any specification of the individual shares of the partners the presumption under the Partnership Act, namely, that the partners shall have equal shares in the profit of the firm should apply in the case of minors and, therefore, those minors have equal share in their collective share and in that view of the matter he directed the Income-tax Officer to grant registration to the assessee-firm.

(3.) In the appeal filed by the revenue, it has been held by the Tribunal that the individual shares of those minors are not specified and, therefore, the Tribunal allowed the appeal filed by the revenue and set aside the order of the Appellate Assistant Commissioner. In this connection we may note here that an appeal was also filed by the assessee, but we are not concerned with it in this reference.