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TMI Blog1974 (10) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... her persons by means of a deed of partnership dated the 14th April, 1961. The accounting year of the assessee-firm is the Bengali calendar year and the previous year relevant to the assessment year 1962-63 started from the 14th April, 1961. The licence for carrying on the rice business was in the name of Manick Chandra Dey and even after the constitution of the assessee-firm the business was carried on by the assessee-firm during the relevant previous year under that very licence. The assessee-firm filed an application for registration under section 26A of the Indian Income-tax Act, 1922, which was subsequently replaced by an application under section 185 of the Income-tax Act, 1961. The Income-tax Officer rejected that application on the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order the assessee-firm went up in appeal before the Appellate Tribunal. The Appellate Tribunal referred to the provisions of paragraphs 3(1), 4 and 7(2) and 7(3) of the Control Order and held that the licence which had been granted to Manick Chandra Dey could not have been exploited by the assessee-firm. On the constitution of the assessee-firm it should have applied for a fresh licence under paragraph 4 and sub-paragraph (3) of paragraph 7 of the Control Order and for the contravention of these provisions the licensing authority could have suspended or revoked the licence. In the present case the licensing authority had not taken any action against the original licensee or the assessee-firm and the Tribunal emphasized that there was no pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the licence which stood in the name of one of its partners and was not transferable and the assessee-firm was entitled to registration under section 185 of the Income-tax Act, 1961 ? " During the course of hearing of this reference our attention was drawn to the decision in the case of Commissioner of Income-tax v. Benarsi Das and Co. [1962] 44 ITR 835 (Punj), in the case of Mohapatra Bhandar v. Commissioner of Income-tax [1965] 58 ITR 671 (Orissa) and in the case of Lalchand Mohan Lal Fazilka v. Commissioner of Income-tax [1967] 65 ITR 418 (Punj). Those decisions suggest that the formation of such kind of partnership might become illegal. On the other hand, it appears that there are authorities to the contrary in the case of T. K. P. R. R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come-tax [1971] 79 ITR 546 (SC). There also the assessee-firm which was a firm with two partners, D and his brother, M, constituted under a deed of partnership dated the 21st July, 1945, carried on business of wholesale merchants and of foreign liquor. D had obtained a licence which was renewed every year, in Form FL II for wholesale vending in foreign liquor under rule 574 of the U.P. Excise Rules, 1910. The licence contained no prohibition against entering into partnership for carrying on the business in foreign liquor by the holder of the licence. The firm was registered under section 26A of the Indian Income-tax Act, 1922, and the registration had been renewed also for the assessment years 1958-59 and 1959-60. But the Commissioner under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t become illegal by taking in four others as partners and was not disentitled to registration under section 185 of the Income-tax Act, 1961, as the Punjab Fisheries Rules did not contain any rule prohibiting from entering into partnership, so far as the fishing licences were concerned. The Punjab High Court had also considered these two previous decisions in the light of the subsequent Supreme Court decision and was of the opinion that these could not be considered to be good law any longer. Similar view was taken by the Full Bench of the Allahabad High Court in the case of P. C. Kapoor v. Commissioner of Income-tax [1973] 90 ITR 172 (All) [FB]. In this case the provisions of the Control Order, as we have set out hereinbefore, do not prohib ..... X X X X Extracts X X X X X X X X Extracts X X X X
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