COMMISSIONER OF INCOME TAX Vs. MITTAL ENGINEERING CO

JUDGEMENT

(1.) THE alleged assessee claimed registration of the firm, M/s. Mittal Engineering Co., for the assessment year 1973-74 on the basis of the partnership deed dated September 24, 1972. THE firm consisted of seven members two of whom were minors and two were ladies. THE minors were stated to have been admitted to the benefits of the partnership and the ladies were described as sleeping partners. Both these sets of partners neither contributed any personal skill nor capital. On these facts, the Income-tax Officer held that the said partners were benamidars of Shri Nikka Ram and declined registration. This order having been affirmed by the Appellate Assistant Commissioner, they approached the Tribunal. THEir appeal was allowed and reversing the finding that the ladies and minor partners were only benamidars, the case was remanded for framing an assessment after granting registration. THE application of the Revenue under Section 256(1) of the Income-tax Act, 1961 (for short "the Act"), having been declined, this petition has been filed under Sub-section (2) of Section 256 of the Act for a mandamus requiring the Tribunal to refer the following three questions to this court:

(2.) ALTHOUGH question No. 1 is a question of law, it stands concluded by the decision of the Supreme Court in K.D. Kamath and Co. v. CIT [1971] 82 ITR 680, wherein it was held that the legal requirement under Section 4 of the Partnership Act to constitute a partnership in law is that there must be an agreement to share the profits, or losses of the business; and the business must be carried on by all the partners or any of them acting for all.