Law:

Section:

Section 185 of the Income-tax Act, 1961 [Corresponding to section 26A of the Indian Income-tax Act, 1922] - Firm - Position prior to 1-4-1993 - Assessment years 1955-56 and 1957-58 - Whether a sub-partnership is entitled to registration under section 26A of 1922 Act - Held, yes FACTS JM was partner in a firm HES. With regard to this share, he constituted a partnership. The partnership consisted of himself, his two major grandsons and two other minor grandsons were admitted to the benefits of that partnership. This new firm was duly registered with the Registrar of Assurances and Registrar of Firms. The sub-partnership filed a return showing the income from HES representing the share of JM as the share of the partners in the sub-partnership, along with an application for registrar of the sub-partnership under section 26A. The Income-tax Officer rejected the application for registration of the sub-partnership, for the assessment years 1955-56 and 1957-58. The Tribunal held that the partnership was genuine and, accordingly, its registration was ordered. On reference : HELD Following the decision of the Supreme Court in Murlidhar Himatsingka v. Commissioner of Income-tax [1966] 62 ITR 323 , it was to be held in the instant case that the assessee-firm, a sub-partnership was entitled to registration under section 26A. Note : The decision was in favour of the assessee. JUDGMENT The Income-tax Appellate Tribunal, Delhi Bench "B", has referred the following question of law for our determination : "Whether the sub-partnership constituted under the deed of partnership dated the 16th October, 1954, is a valid partnership entitled to registration under section 26A of the Income-tax Act, 1922?" The answer to this question is now furnished by the decision of the Supreme Court in Murlidhar Himatsingka v. Commissioner of Income-tax [1966] 62 ITR 323 (SC). On facts, the present case is a much stronger case than the one before the Supreme Court. In order to appreciate the applicability of the Supreme Court decision, the following facts may be stated : The assessment years in question are 1955-56 and 1957-58. R.B. Jodhamal Kuthiala held 4 as 6p. share in Messrs. Hoshiarpur…

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