- (1.) THIS is a reference made by the Income-tax Appellate Tribunal in pursuance of the order of this Court in Income-tax Case No. 12 of 1960, dated 24th of May, 1961.
(2.) THE facts giving rise to this reference may briefly be stated as under: A partnership deed was executed by four persons, namely, Ghungar Mal and three others, constituting a partnership firm named as Ghungar Mal Amar Chand. One bigram Prakash minor was admitted to the benefits of the partnership. The four partners and the minor were to have one-fifth share each in the profits while the losses were to be borne by the four contracting partners in equal shares. This partnership was to carry on the business of six existing concerns and it was further provided that "the partnership business may enter into partnership with other person or persons and may close any of the partnership concerns with the consent of other partners. " (Section Ex. 'b' at p. 6 of the printed paper-book ). Later, a partnership was entered into between this firm on the one hand and an individual named R. B, Jodha Mal on the other on 22nd of February, 1951 according to this partnership deed (Ex. 'a' at p. 4 of the printed paper-book) this firm was to be named as R. B. Jodha Mal Ghungar Mal (hereinafter referred to as the new firm or firm) and the profits and losses were to be divided equally between the parties. This was signed by Jodha Mal and Ghungar Mal--the latter purporting to sign by Ghungar Mal Amar Chand (hereinafter referred to as the smaller firm ). Later, on 28th of January, 1958, an application was made by the new firm to the Income-tax Officer, Special Circle, Ambala, under S. 26-A of the indian Income-tax Act for the registration of the firm. In paragraph 2 it was stated as under: "the original instrument of partnership under which the firm is constituted specifying the individual shares of the partners, together with a copy, is enclosed. The prescribed particulars are given in the schedule below. " This was signed by Jodha Mal and the four major partners of the smaller firm. In the schedule it was mentioned that Jodha Mal was to get 8-anna share in a rupee of profits or losses and the smaller firm was to get the remaining 8--anna share. A note was given that Messrs Ghungar Mal Amar Chand is a partnership and its 8anna share is divisible amongst its four named partners and Bikram Prakash minor in equal shares, except that the minor was to share only in profits. The registration was refused by the Income-tax Officer and the appeal filed by the firm was dismissed by the Appellate Assistant Commissioner. Before the Income-tax Appellate Tribunal, there was a difference of opinion between the Judicial member and the Accountant-Member. The Judicial Member was of the view that the registration of the firm was rightly refused while the Accountant Member was of the contrary view. On the matter being referred to a third member, Mr. S. C. Manchanda (as he then was), he agreed with the view of the Judicial Member and thus, the appeal filed by the new firm before the Income-tax Appellate Tribunal was also dismissed.
(3.) THE reference made by the Income-tax Appellate Tribunal is in the following words:- "whether, in the facts and circumstances of this case, the assessee firm was entitled to registration under Section 26-A of the Income-tax Act. ";