COMMISSIONER OF INCOME-TAX Vs. BRIJ MOHAN SINGH

JUDGEMENT

(1.) THE following question has been referred to this court by the Income-tax Appellate Tribunal (for short, "the Tribunal") under Section 256 (1) of the Income-tax Act, 1961 (for short, "the Act") :

(2.) THE assessee-firm was engaged in the business of liquor. An application, seeking registration of the firm for the assessment year 1978-79 was filed in Form No. 12. The Income-tax Officer noticed that there were 13 persons in the firm as partners and out of them seven persons were not licensees for the liquor vends. The contract for different liquor vends had been obtained by different persons and not by the firm. The licensees brought in some more persons to run the business and to exploit the licence. The renewal of registration was refused by the Income-tax Officer on the ground that seven partners of the firm were not licensees entitled to run the business in liquor.

(3.) THE question which actually arises for consideration is whether registration can be refused to a partnership firm under Section 185 (1) of the Income-tax Act, 1961, on the ground that the person or persons holding licence to run a business in liquor had constituted such firm by adding more persons as partners without permission from the competent authority under the Punjab Excise Act and the rules framed thereunder.