All the 7 sub partnerships preferred further appeals to the Income tax Appellate Tribunal.
The main partnership has been registered by the Income tax Department under the Income tax Act.
The High Court answered the question in the affirmative in favour of the assessee and against the revenue.
The impugned judgment of the High Court is reported in 1978 111 I.T.R. 93.
The partners of the sub partnership filed an application for its registration as a firm under the Income tax Act on September 30, 1963.
The main partnership, that is, Nizamabad Sendhi Group Contractors are the lessees who were the highest bidders in the auction held by the excise authorities for the Fasli year 1962 63.
The Income tax Officer rejected the claim of the sub partnership for registration under the Income tax Act on the ground that numberbusiness was companyducted by the assessee during the relevant year of account and that the sub partnership was void ab initio under the Andhra Pradesh Telangana Area Abkari Act hereinafter referred to as the Abkari Act as the members of the sub partnership except Ganga Goud were number licence holder under the Abkari Act.
Accordingly, the Tribunal allowed the assesses appeals and held that all the sub partnerships were entitled to registration under the Income tax Act.
Aggrieved by the decision of the Tribunal, the revenue obtained a reference under Section 256 1 of the Income tax Act, 1961 in all the matters for the decision of the aforesaid companymon question of law which arose out the Tribunals order.
similar applications for registration under the Income tax Act by six other sub partnerships formed by different partners of the main partnership with others were rejected by the assessing authority and their appeals were also dismissed by the Appellate Assistant Commissioner.
Hence this appeal by the revenue on certificate granted by the High Court.
The decision of the High Court was rendered in a reference made by the Income tax Appellate Tribunal, Hyderabad bench under Section 256 1 of the Income tax Act, 1961 at the instance of the revenue for opinion on the following question of law, namely.
On August 27, 1963, Ganga Goad and 11 others executed a partnership deed to the effect that Ganga Goud after becoming a partner in the Nizamabad Sendhi Group Contractors, the main partnership found it difficult to companytribute the required capital towards his share and, therefore, other 11 partners of the sub partnership agreed to provide the finance on they being taken as partners in respect of Ganga Gouds 10 share in the main partnership.
The material facts are For the relevant assessment year a partnership by name Nizamabad Group Sendhi Contractors was formed under a deed of partnership dated October 15, 1962 with 17 partners one of whom Rampuram Ganga Goud had 10 share.
1995 2 SCR 404 The Judgment of the Court was delivered by S. VERMA, J, This appeal is by a certificate granted by the Andhra Pradesh High Court on the question as to whether a sub partnership which is alleged to be illegal as being in violation of Section 14 of the Abkari Act, can be registered under the Income tax Act.
Whether, on the facts and in the circumstances of the case, the sub partnerships are entitled to the benefits of registration under the Income tax Act, 1961, for the assessment year 1964 65?
