HARI SWARUP, J. - (1.) THE Income-tax Appellate Tribunal has, at the instance of the Addl. Commissioner of Income-tax, Kanpur, referred the following two questions of law for the opinion of this court : "(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was legally justified in its conclusion that the partnership deed dated November 15, 1961, admitted the minors to the benefits of partnership and they were not full-fledged partners ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee-firm was entitled to registration under section 185 of the Income-tax Act, 1961 ?"
(2.) THE assessee-firm was constituted under a deed of partnership dated 15th November, 1961, with two major partners, viz., Kameshwar Dayal and Govardhan Das. Two minors, Uttam Kumar and Pramod Kumar, were also alleged to be admitted to the benefits of this partnership. THE Income-tax Officer held that according to the partnership deed the minors were not only admitted to the benefits of partnership but were made full-fledged partners and accordingly he came to the conclusion that the agreement was not registrable under section 185 of Income-tax Act, 1961. THE assessee went up in appeal, but the appeal was dismissed by the Appellate Assistant Commissioner. THE assessee then went up in appeal before the Income-tax Appellate Tribunal. THE Tribunal allowed the appeal holding that the partnership deed had created a valid partnership between the two major partners and had only admitted the two minors to the benefits of partnership. THE Tribunal, therefore, directed the department to grant registration to the firm. THE department, feeling aggrieved, got the aforesaid two questions referred for our opinion. The relevant clauses of the partnership deed are in the following terms : "1. That the name of the partnership shall be Uttam Kumar Promod Kumar, Commission Agents, Auraiya, District Etawah, and the share of each party shall be as under : That on the close of the year an account shall be taken of all the assets and liabilities of the firm as also of the profits and losses of the firm. The net profit or loss shall be divided between the parties according to their shares specified above and shall be credited or debited in their personal accounts.
(3.) THAT parties Nos. 3 and 4 are the main financiers of the business. The parties may charge a reasonable interest on the capital. That the parties are at liberty to accept money from any other party with or without interest on terms mutually agreed by them. Parties shall be entitled to draw sums of money and such drawings shall be debited to their personal accounts.;