COMMISSIONER OF INCOME-TAX CENTRAL Vs. DUDWALA

JUDGEMENT

(1.) AT the instance of the Commissioners of Income -tax, the question of law which has been referred to this Court for its opinion by the Tribunal is in these terms : 'Whether on the facts and in the circumstances of this case the Tribunal was right in holding that the partnership firm of Dudwala & Co. should be registered under Section 26A of the income -tax Act.'

(2.) THE facts shortly are as follows. The partners of the firm were Rai Bahadur Rameshwar Nathany, representing the Mitakshara joint family under the name and style of Baldeodas Rameswar, one Mannalal Musuddi and one Ramkumar Agarwal. Mannalal Musuddi went out of the partnership in November 1942 and a fresh deed was executed by which the two partners carried on the business of the firm, in which the share of Rameswar Nathany (representing Baldeodas Rameswar) was twelve annas and Ramkumar Agarwala three anna? The remaining one anna share was devoted to charity. The deed was dated 10th February 1946.

(3.) BY Clause 1 of the terms of Settlement, the joint family came to an end on 21st September 1943. In Clause 3 the shares of each of the members of the family after the partition are stated. Clauses 7 and 10 are important and they are set out below, Clause 7. 'The business carried on under the names and Styles of Rai Bahadur Baldeodas Rameswar and Rameswar Nathany & Co. shall be stopped from the date hereof but this is not to affect the partnership carried on under the name and Style of Messrs. Dudwala & Co, in which Messrs Baldeodas Rameswar are the partners and the said partnership shall be continued as provided in Clause 10 hereof.' Clause 10. 'In the firm of Dudwalla & Co. the parties hereto have twelve annas shares and it shall remain joint and the parties shall be entitled thereto according to the shares mentioned in Clause 3 thereof.'