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Issues:
1. Interpretation of the rules regarding registration of a firm under the Income-tax Act. 2. Determination of whether a partnership deed had ceased to be operative and the implications on registration. 3. Consideration of the legal principles governing the continuation of a partnership after the expiry of a deed. 4. Assessment of the timing of registration in relation to the financial year. Analysis: 1. The judgment pertains to a reference under Section 66 of the Income-tax Act regarding the registration of a partnership firm. The main issue is whether the Assessees were entitled to be registered under Rule 4 of the Rules framed under the Act. The key contention revolves around the interpretation of the term 'registered firm' as defined in Section 2(14) of the Act and the requirements set out in Rule 2 for registration of a firm under an instrument of partnership specifying individual shares of partners. 2. The case involves the consideration of whether the partnership deed in question had ceased to be operative at the time of application for registration. The Commissioner refused registration on the basis that the partnership was being carried out under a new verbal agreement, which did not qualify as an instrument of partnership under the Rules. The Assessees argued that the original partnership deed was effectively continued through a verbal arrangement or tacit consent among the partners. 3. The judgment delves into the legal principles governing the continuation of a partnership after the expiry of a deed. Reference is made to precedents such as Clark v. Leach and Neilson v. Mossend Iron Co., emphasizing that after the expiration of a term, a partnership may continue at will with the old terms presumed to apply only to the extent they are relevant. The court examined whether the original contract was actually continued in existence or whether its terms were impliedly revived by the tacit verbal agreement among the partners. 4. Additionally, the timing of the registration application in relation to the financial year under assessment was addressed. The court clarified that the application for registration, even if granted, would only apply to the financial year 1927-28. The contention that registration should not have been refused due to the timing of the trading profits in relation to the expiration of the deed was dismissed, affirming the Commissioner's decision to reject the application for registration. In conclusion, the court upheld the Commissioner's decision to refuse registration, emphasizing the absence of an operative document to be registered at the time of application. The judgment was concurred with by the other judges, and the Assessee was directed to pay the Government costs incurred in the reference process.
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