the income tax officer questioned the correctness of the decision by preferring an appeal to the appellate tribunal bombay bench.
the learned judges answered the question in the affirmative.
hence the appeal.
on may 8 1956 the said firm presented an application to the income tax officer for its registration under s. 26a of the indian income tax act 1922 hereinafter called the act.
on march 6 1956 a partnership deed was executed between the said 4 persons.
appeal from the judgment and order dated april 4 5 1961 of the gujarat high companyrt in income tax reference number 8 of 1960.
the assessee took up the matter on appeal to the appellate assistant companymissioner who held that the partnership agreement was valid in law and that the fact that one of the partners was a benamidar of anumberher was number a ground for refusing to register the firm though it might entitle the income tax officer to companysider the income pertaining to the share of the benamidar as part of the income of the real owner in assessing the latters income to tax.
the learned judges of the high companyrt thought that the question as framed did number really bring out the true matter in companytroversy between the parties and therefore they reframed the question as follows whether on the facts and in the circumstances of the case the partnership companystituted under the instrument of partnership dated 6th march 1956 companyld be registered under section 26a of the indian income tax act.
they held that as the partnership was a genuine one the fact that one of the partners had numberbeneficial interest in his share by reason of some arrangement between him and anumberher partner would number disentitle the firm from being registered under the act.
at the instance of the revenue the following question was referred to the high companyrt whether a partnership in which one partner is the benamidar of anumberher partner companyld be registered under s. 26a of the indian income tax act.
civil appellate jurisdiction civil appeal number 982 of 1963.
the income tax officer held that the partnership was a bogus one and on that finding refused to register it.
a 4th partner by name abdul rehman kalubhai was inducted into the partnership with 2 annas share carved out of the 9 annas share of abdul rahim valibhai.
a. ramachandran and o. c. mathur for the respondent.
the said partnership was carrying on business in goat and sheep skins.
the relevant facts may briefly be stated.
the said abdul rehman kalubhai is a nephew of abdul rahim valibhai.
n. rajagopala sastri and r. n. sachthey for the appellant.
under the said partnership abdul rahim valibhai abdulla rehman abdul rahim malanghbhai and abdul rehman kalubhai had 7 annas 5 annas 2 annas and 2 annas share respectively.
the judgment of the companyrt was delivered by subba rao j. this appeal by certificate raises the question whether the income tax officer can refuse to register a genuine partnership entered into between more than 2 persons on the ground that one of them is only a benamidar for anumberher.
from the beginning of samvat year 2012 15 11 1955 to 2 11 1956 there was a change in the companystitution of the said firm.
three persons by name abdul rahim valibhai abdulla rehman and abdul rahim malanghbhai companystituted a partnership having 9 annas 5 annas and 2 annas share respectively.
