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Section 185 of the Income-tax Act, 1961 - Firm - Position prior to 1-4-1993 - Assessment year 1980-81 - Whether where there is no prohibition for holder of licence from entering into partnership arrangements, he can validly enter into partnership, and such partnership is legal and is entitled to registration - Held, yes - Whether, therefore, where licence for liquor business continued to stand in name of individual partner, firm would be entitled to registration - Held, yes FACTS The assessee firm which was carrying on the business of sale of foreign liquor, filed an application for registration claiming that it was entitled to registration in terms of section 185. The Assessing Officer noticed that the name of one of the partners of assessee was not endorsed in the licence issued for carrying on the business and, therefore, refused registration. On appeal, the AAC affirmed the order of the Assessing Officer. However, the Tribunal held that the refusal was not justified because the registration was to be granted notwithstanding the fact that the licence for selling liquor was issued to only one partner. On reference : HELD Where there is no prohibition for the holder of licence from entering into partnership arrangements, he can validly enter into partnership, and such partnership is legal and is entitled to registration. In the instant case, the licence continued to stand in the name of the individual partner. Therefore, the Tribunal was justified in directing grant of the assessee's claim for registration for the relevant assessment year. Note : The case was decided in favour of the assessee. CASE REVIEW CIT v. Narpati Khan and Co. [1974] 97 ITR 645 (Patna) and Md. Warasat Hussain v. CIT [1971] 82 ITR 718 (Patna)followed and relied upon. CASES REFERRED TO CIT v. Narpati Khan & Co. [1974] 97 ITR 645 (Pat.)Md. Warasat Hussain v. CIT [1971] 82 ITR 718 (Pat.), CIT v. Hardit Singh Pal Chand & Co. [1979] 120 ITR 289 (Punj. & Har.). CIT v. Kondra Durgaiya [1983] 143 ITR 315 (MP) and Jer & Co. v. CIT [1971] 79 ITR 546 (SC). R.P. Kar for the Applicant. S. Ray for the Respondent. JUDGMENT A. Pasayat, J.-At the instance of the Revenue, the following…

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