Ajit K. Sengupta, J. - (1.) This reference under Section 256(1) of the Income-tax Act, 1961, relates to the assessment year 1973-74. This reference arises out of the order of the Tribunal in a proceeding under Section 185 of the Act, where the Income-tax Officer refused registration to the assessee-firm. In the order under Section 185, the Income-tax Officer has held as follows : "The topic 'partnership' has been dealt with in Section 2(23) of the Income-tax Act where general principles have been laid down. Firstly, the question of validity of partnership is most important. 'Partnership' is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. An association of persons would not constitute a partnership unless they carry on a business. An agreement to share profits is very important and the emphasis has been laid on the word 'business' and 'profits' and not on incomings. This is a case of 'co-ownership of leasehold property' as distinct from 'partnership'. As such, the claim for partnership is rejected and the status adopted is that of association of persons ".
(2.) The Appellate Assistant Commissioner held that only a single property had been taken on lease by the assessee and it has been let out to a single tenant. This cannot be considered to constitute a business activity.
(3.) The assessee preferred two appeals--one against the order refusing registration under Section 185 of the Act and the other against the assessment of income.;