Satish Chandra, C.J. - (1.) THE reference has been referred to a Full Bench because the Division Bench felt that this Court's decision in Commr. of Income-tax v. Uttam Kumar Pramod Kumar (1975 Tax LR 339) (All) requires reconsideration. THE reported decision was also of the present assessee, but it was rendered in respect of earlier assessment years. THE facts are hence identical.
(2.) THE Tribunal has 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 15th November, 1961, admitted the minors to the benefits of the 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 renewal of registration under Section 184 (7) of the Income-tax Act, 1961. In respect of the first question, the facts are that the assessee firm was constituted under a partnership deed dated 15th November, 1961. The Income-tax Officer repelled the assessee's plea that the two minors had only been admitted to the benefits of the partnership. He held that they were treated as full-fledged partners, though they were minors. This could not be validly done. The firm was not entitled to registration. This view was upheld in appeal. The assessee took the matter to the Tribunal. The Tribunal, on a construction of the partnership deed, held that the minors have been admitted to the benefits of the partnership. They were not full-fledged partners.
(3.) CLAUSE 1 of the partnership deed provides- "1. That the name of the partnership shall be Uttam Kumar Pramod Kumar Commission Agents Auraiya, district Etawah, and the share of each party shall be as under:-- JUDGEMENT_796_ITR115_1978Html1.htm Clauses 3 and 4 of the said deed provide - "3. That on the close of the year an account shall be taken of all the assets and liabilities of the firm and also of the profits and losses of the firm. The net profit or loss shall be divided in between the parties according to their shares specified above and shall be credited or debited in their personal accounts. 4. That the parties Nos. 3 and 4 are the main financiers of the business. The parties may charge a reasonable interest on the capital." ;