- (1.) THE Income-tax Appellate Tribunal, Chandigarh Bench, has referred the following two questions of law for our opinion : "1. Whether, on the facts and in the circumstances of the case, the assessee-firm constituted under the deed of partnership dated 1st December, 1966, has been rightly refused registration under Section 185 (1) (b) of the Income-tax Act ?
(2.) WHETHER, on the facts and in the circumstances of the case, the status of an association of persons has been rightly assigned to the assessee ? "2. These questions have arisen in the following circumstances : Sh. Des Raj was carrying on business in kirana as an individual. A deed of partnership was executed on December 1, 1964, to take over this business. The partners were as follows : (i) Sh. Des Raj 50 per cent (ii) Sh. Yog Raj 25 per cent. (iii) Sh. Rajinder Kumar 25 per cent.
(3.) THE latter two are the sons of Des Raj. On December 1, 1966, another deed of partnership was executed which was made operative with effect from September 1, 1966. This deed was executed because Sh. Rajinder Kumar retired from the partnership and his place was taken by his brother, Subhash Chander. The shares of the partners under this agreement were : Sh. Des Raj 40 paise in a rupee. (a) Sh. Yog Raj 35 paise in a rupee. (b ) Sh. Subhash Chander 25 paise in a rupee. (c);