- (1.) This appeal, by special leave, raises the question whether the deed, dated 20/03/1959, and marked Ex. A is an Instrument of Partnership on the basis of which the appellant firm is eligible to be granted registration under S. 26-A of the Indian Income-tax Act, 1922 (hereinafter to be referred as the Income-tax Act).
(2.) The appellant is a firm consisting of six partners and the partnership was constituted under the document, dated 20/03/1959. The business of the partnership, as recited in the deed, is stated to have been carried on in partnership from 1/10/1958. The partnership was registered under the Indian, Partnership Act; 1932, (hereinafter to be referred as the Partnership Act) on or about August 11, 1959. For the assessment year 1959-60, corresponding to the previous year ending 31/03/1959,-the appellant filed an application to the Income-tax Officer, 'a' Ward, Dharawar under section 26-A for registration of the partnership in the name of M/s. K. D. Kamath and Company. The Income-tax Officer, by his order, dated28/09/1960. declined to grant registration on the ground that there was no genuine partnership brought into existence by the deed of 20/03/1959 and that the claim of the firm having been constituted is not genuine. The said officer further held that the business should be held to be the sole concern of K. D. Kamath. For coming to this conclusion, the Income-lax officer has mainly relied on Clauses 8, 9, 12 and 16 of the partnership deed. Though the Income-tax Officer has used a loose expression that there is no genuine partnership, the sum and substance of his finding is that there is no relationship of partners inter se created under the said document.
(3.) Mr. S. K. Iyer, learned counsel for the Revenue, has also clarified the position before us by slating that the Department is not challenging the genuineness of the document. According to the learned counsel, the stand taken by the Revenue is that no legal relationship of partners has been brought. about as between the parties to the document, In short, his contention is that the arrangement evidenced by Ex. A is not that of partnership as understood in law.;