Law: Income Tax Act, 1961

Section: 185

Income-tax---Reference---Firm---Registration---Genuineness of firm---Question regarding genuineness of firm is- a question of fact---No question of law arises from finding regarding genuineness of firm---Indian Income Tax Act, 1961, Ss .185 & 256. The question whether a person is a partner in a firm or whether a partnership is a genuine one, is a question of fact to be determined in the circumstances and evidence present in each case. The finding of fact would be erroneous in law only if it is not supported by any evidence or it is unreasonable or perverse. When a conclusion has been reached on an appreciation of a number of facts, established by evidence, the question whether that conclusion is sound or not, must be determined not by considering the weight to be attached to each single fact in isolation, but by assessing the cumulative effect of all the facts put together: Held, dismissing the application to direct reference, that the Tribunal on an appreciation of the facts and circumstances of the case had believed in the existence of the partnership and the genuineness of the partnership and hence, no question of law arose. Hemandass Dhanrajmal v. CIT (1981) 132 ITR 369 (Raj.) fol. Brijlal Madanlal v. CIT (1980) 121 ITR, 364 (Bom.); CIT v. Juggilal Kamlapat (1967) 63 ITR 292 (SC); CIT v. Lalit Trading Corporation (1980) 125 ITR 586 (Cal.) and Subhash Medical Stores v. CIT (1984) 147 ITR 486 (Raj.) ref. JUDGMENT Heard learned counsel for the applicant and respondent on the application under section 5 of the Limitation Act. We condone the delay in filing the reference application under section 256(2) of the Income Tax Act, 1961, and it be posted for hearing. The present application under section 256(2) of the Income Tax Act, 1961, as made by the Commissioner of Income-tax, Jodhpur, is on the limited question as to "whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was legally, justified in holding that the firm was a genuine one and in granting registration under section 185 to the assessee-firm"? The assessee-firm contended that it came into existence with effect from April 1, 1986, under a partnership deed,…

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