M.RAMAKRISHNA,C.J. - (1.)THE Tribunal referred the following question under S. 256(2) of the INCOME TAX ACT, 1961:
"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that capital contributed by a partner, Kashiram Agarwala (HUF), in the form of land was genuine and it became the property of the assessee -firm ?" The competent authority has sought for an opinion of this Court on the above leading question. We have perused the grounds on which the matter came up for consideration before the Tribunal and we have also heard learned standing counsel for the Revenue.

(2.)AT the outset, a question was asked by the Court to learned counsel for the Revenue with a view to answer the question, whether the landed property referred to in the course of the question, said to have been contributed by way of capital contribution by the partner of Kashiram Ramgopal with any documentary evidence, evidencing the transfer of any right in the landed property was made and executed by the concerned person. Learned counsel for the Revenue frankly admitted that there was no document evidencing the transfer of the landed property in question in favour of the partnership firm. Sec. 17 of the Registration Act, 1908, hereinafter referred to as the Act, lays down as follows :
"Documents of which registration is compulsory. -(1) The following documents shall be registered, if the property to which they relate is situate in a district in which, and if they have been executed on or after the date on which, Act No. XVI of 1864, or the Indian Registration Act, 1866, or the Indian Registration Act, 1871, or the Indian Registration Act, 1877, or this Act came or comes into force, namely : (a) instruments of gift of immovable property; (b) other non -testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property ;". (emphasis, italicized in print, supplied)

Therefore, in the light of the provisions of S. 17(b) of the Registration Act, 1908, in the instant case, so long as there is no document evidencing registration of the transfer, with a view to transfer the right in the land in favour of the partnership firm by its real owner, in the eye of law, no right whatsoever has been transferred from the land in question. Therefore, it is unnecessary for the competent authority to have raised the question under reference inasmuch as so long as no right in respect of the immovable property has been transferred or passed in favour of the partnership firm by its real owner it is unnecessary for this Court to deal with this question as referred to us and as extracted above. Therefore, we answer this reference in the negative and in favour of the respondent. But we make it clear that as and when such incident comes to the notice of the authority that the rights in the landed property have been actually transferred and those rights are being enjoyed by any person who is liable to pay taxes, it is open to the authority to take appropriate action.