JABALPUR ICE MANUFACTURING ASSOCIATION Vs. COMMISSIONER OF INCOME TAX MADHYA PRADESH AND BHOPAL

JUDGEMENT

(1.) "Whether the assessee firm could be registered under section 26A of the Indian Income-tax Act and rules 2 to 5 of the Indian Income-tax Rules, 1922".

(2.) The assessee Jabalpur Ice Manufacturing Association, Jabalpur, claims to be a firm constituted by a deed of partnership dated the 18th February, 1949. The partners are (i) Bharat Ice and Aerated Waters, Ltd., and (ii) The Nerbudda Ice Factory, holding equal shares in profits and losses. The deed of partnership was signed by the managing director Shri M. J. Umrigar for Bharat Ice and Aerated Waters, Ltd., and by Purushottam Lal Sood for and on behalf of Messrs. Saligram & Co., which is a firm consisting of two partners, viz., Purushottam Lal Sood and Bhoora Ram, and owns the Nerbudda Ice Factory.

(3.) THE answer to the reference depends upon the question as to whether a firm as such is entitled to enter into partnership with another firm or individuals. If it can do so, then in the present case the Nerbudda Ice Factory would be deemed to be a partner of the assessee firm with a defined share in profits and losses, and consequently the decision of the Tribunal refusing registration under section 26A of the India Income-tax Act, 1922, would be erroneous. If not, only the partners of Messrs. Saligram & Co. would individually become partners in the assessee firm and as their shares inter se were not defined, the requirements of section 26A of the Indian Income-tax Act, 1922, would not be fulfilled and there would be no case for registration of the assessee firm.