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Section 256 of the Income-tax Act, 1961 - Reference - Question of fact - Whether when ITO's finding that assessee-firm was not genuine while deciding application under section 185 was a finding of fact, answer to question of registration under section 185 was to be refused as no question of law arose - Held, yes Facts The assessee-firm pleaded before the ITO, that one of its partners K was the financing partner. However, K was not produced before the ITO in spite of opportunities granted by the ITO. Therefore, the ITO refused to register the assessee under section 185. On appeal, the Tribunal upheld the ITO's order. On reference: Held In view of the decision in the cases CIT v. G. Parthasarathy Naidu & Sons [1980] 121 ITR 97 (AP) (FB ) and Saraf Bros. v. CIT [1980 ] 4 Taxman 104 (Raj.), in the Instant case, the finding of the ITO that the assessee was not genuine while deciding the application under section 185 was a finding of fact and no question of law arose. Therefore, the answer to the question of registration under section 185 was to be refused as no question of law arose. Cases referred To CIT v. G. Parthasarathy Naidu & Sons [1980] 121 ITR 97 (AP) (FB), Saraf Bros. v. CIT [1980] 4 Taxman 104 (Raj.) and CIT v.Murlidhar Jhawar & Puma Ginning & Pressing Factory [1966] 60 ITR 95 (SC). JUDGMENT Sen, J. -This is a reference under section 256(1) of the Income-tax Act, 1961 ('the Act') at the instance of the assessee by the Tribunal to answer the following questions: "1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the validity of the assessment under section 143(3) of the Income-tax Act, 1961? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the refusal of registration of the firm under section 185 of the Income-tax Act, 1961?" 2. The assessee Mahadeo Biscuits & Confectionery Works had pleaded before the ITO that one of the partners of the firm was Smt. Krishnabai who was the financing partner. However, Smt. Krishnabai was not produced before the ITO in spite of opportunities being granted by the ITO. Therefore, he refused to…

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