V M N RADHA AMMAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE only question (that has been referred to us by the Appellate Tribunal under Section 66 (1) of the Act is whether in the circumstances of the case, the Tribunal was correct in law in holding that the partnership deed cannot be registered.

(2.) ONE V.M. Narayanaswami Mudaliar carried on business in handloom cloth and piece goods. In respect of this business, he was assessed as the karta, of an undivided Hindu family up to the assessment year 1941-42. In 1942 he died leaving six minor sons and a widow. During the assessment years 1942-43, and 1943-44, the income was assessed on the basis of the income of an undivided Hindu family represented by the widow Radha Ammal. The assessment year with which we are now concerned is the year 1944-46 and the accounting year is the year ending 16th November 1943. During the accounting year the widow entered into two partnerships in respect of the two heads of business with two different persons. ONE was with one Arnmugha Mudaliar who was an old clerk of the firm and concerned the handloom business. In respect of piece goods business she entered into partnership with one Govindaraja Mudaliar. We are now concerned only with the partnership relating to handloom business. This deed was presented for registration before the income-tax authorities under Section 26-A of the Act. Under this document the widow agreed to treat Arumugha Mudaliar as a partner and she purported to act as guardian of the six minor sons. The registration of the deed was refused by the Income tax Officer and the appeals against that order also shared the same fate.