COMMISSIONER OF INCOME TAX Vs. ALLASIA ENTERPRISES.

JUDGEMENT

(1.) THE following question has been referred to this Court by the Tribunal under s. 256(1) of the IT Act, 1961 (for short, "the Act") :

(2.) THE assessee firm was engaged in the business of liquor under a licence. The firm was constituted under a partnership deed executed on 10th February, 1978, by 4 persons, namely, Satya Paul, Girdhari Lal, Kapil Dev and Darshan Anand. Application in Form No. 11 along with the original partnership deed was filed by the assessee for the asst. yr. 1978 -79, seeking the registration of the firm under the Act. The ITO noticed that L -1 licence for running the business in Indian made foreign liquor had been issued by the excise authority of Punjab in the name of Satya Paul only. The licensee, Satya Paul, had admitted the aforesaid 3 persons as partners to run the business, though their names had not been entered in the licence by the concerned excise authority. The ITO, therefore, refused to grant registration to the firm under s. 185(1)(b), of the Act on the ground that the firm had been constituted in contravention of the Punjab Excise Act and the Rules framed thereunder.

(3.) CLAUSE 8 of the Partnership deed (Annexure D) reads as under :