Sub-partnership registration under income-tax law upheld where the arrangement was genuine and within the reference scope.

A genuine sub-partnership linked to an existing income-bearing interest was treated as capable of registration under section 26A of the Income-tax Act, 1922, following the controlling Supreme Court principle. The genuineness of the arrangement was a pure question of fact and was not referred for decision, so it was not examined further. An additional contention that the arrangement amounted to an alienation of income was also not entertained because it had not been raised before the Tribunal and did not arise from the reference under section 66(1). The referred question was answered in the affirmative, and registration was upheld.

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Issues: Whether a sub-partnership constituted under the deed dated 16 October 1954 was a valid partnership entitled to registration under section 26A of the Income-tax Act, 1922.

Analysis: The question was answered by the controlling Supreme Court decision holding that a sub-partnership can qualify for registration under section 26A. The genuineness of the partnership was a pure question of fact and had not been referred for decision. A further argument that the arrangement amounted to an alienation of income could not be entertained because it had not been raised before the Tribunal and did not arise from the reference under section 66(1).

Conclusion: The referred question was answered in the affirmative and the assessee was held entitled to registration.

Ratio Decidendi: A genuine sub-partnership in relation to an existing income-bearing interest is entitled to registration under section 26A, and issues not arising from the reference cannot be adjudicated in a reference under section 66(1).

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