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Section 185 of Income-tax Act, 1961 - Firm - Position prior to 1-4-1993 - A firm having five partners, obtained a licence in their separate names from Fisheries Department of Punjab Government for fishing in public waters - They took another four persons as partners in same firm - In view of change of constitution of firm - TO refused registration - Whether when Punjab Fisheries Rules does not prohibit entering into partnership so far as fishing licences are concerned, firm could not be denied registration on that basis - Held, yes FACTS A firm having five partners, obtained a licence in their separate names from the Fisheries Department of the Punjab Government for fishing in the public waters. They took another four persons as partners in the same firm. In view of the change in the constitution of the firm, the ITO refused registration holding that the firm was not genuine. The AAC rejected the assessee 's appeal. The Tribunal however reversed the findings of the ITO and the AAC. On reference : HELD So far as the Punjab Fisheries Rules are concerned, there is no rule prohibiting entering into partnership so far as the fishing licences are concerned. Therefore, the Tribunal was right in holding that the firm was entitled to registration under section 185. The case was decided in favour of the assessee. CASES REFERRED TO CIT v. Benarsi Das & Co. [1962] 44 ITR 835 (Punj.), Jer & Co. v. CIT [1966] 60 ITR 335 (All.), Mohapatra Bhandar v. CIT [1965]58 ITR 671 (Ori.) and Jer and Co. v. CIT [1971] 79 ITR 335 (SC). JUDGMENT The Income-tax Appellate Tribunal, Chandigarh Bench, has referred the following question of law for our opinion : "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the firm was entitled to registration under section 185 of the Income-tax Act, 1961 ?" A firm known and styled as Messrs. Gian Chand & Co., having five partners, obtained a licence in their separate names from the Fisheries Department of the Punjab Government for fishing in the public waters. They took another four persons as partners in the same firm. Thus, the firm came to be constituted of nine partners. The…

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