COMMISSIONER OF INCOME TAX Vs. SRIRAM INDUSTRIES DISTRIBUTORS

JUDGEMENT

(1.) At the instance of the Commissioner, West Bengal-III, the following question of law has been referred to this court under Section 256(1) of the Income-tax Act, 1961, for the assessment year 1969-70.

(2.) The facts leading to this reference are that the assessee-firm filed an application on December 30, 1967, for registration for the assessment year 1968-69. The partnership consisted of 13 partners and one minor was admitted to the benefits of the partnership. On a perusal of the partnership deed, the Income-tax Officer found that clause 8 of the deed provided that the capital was to be contributed by all the partners including the minor and on failure to do so, interest was to be charged as the partners may decide. From this, he came to the conclusion that the minor has been treated as equal with the other partners and thus he held that there was no genuine partnership and refused registration for the assessment year 1968-69. For the same reasons, he also refused renewal of registration for the assessment year 1969-70.

(3.) The assessee preferred an appeal before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner allowed the appeals and directed the Income-tax Officer to grant registration for the assessment year 1968-69 and renewal of registration for the assessment year 1969-70.