TaxTMI 
TaxTMI 
1961 (4) TMI 132
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....tituted under a deed of partnership dated August 20, 1951. The applicant applied for the registration of the firm under the Indian Income-tax Act, 1922. The Income-tax Officer refused to register the firm. The Appellate Assistant Commissioner in appeal directed that the firm be registered. The matter was carried further before the Appellate Tribunal. The Tribunal set aside the order of the Appellate Assistant Commissioner. The question that arises for our consideration is the following : "Whether, on the facts and in the circumstances of the case, the Income-tax Officer was right in refusing to grant registration to the assessee under section 26A of the Income-tax Act ?" The point in dispute between the applicant and the respondent is....
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....s in the name of 'Baroda Ice Factory' at Baroda of the Sixth Part." In the deed of partnership it is recited that each of the aforesaid parties had been carrying on independent business at Baroda. It is further recited that the parties had agreed to carry on business in partnership at Baroda in the firm name and style of "The Baroda Ice Co." on the terms and conditions therein appearing. Clauses 1, 5 and 9 of the deed of partnership provide as under ; "1. The partnership shall be that of sale of ice that will be manufactured by each of the parties hereto in their respective factories in Baroda. 5. The partnership shall purchase ice from each of the parties hereto in the first instance on credit and each of the parties heret....
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....ating coils and condensers or otherwise." It is further provided that none of the parties to the deed of partnership should get interested directly in any new firm, factory or concern in Baroda for manufacture and/or sale of ice. There is a provision for contribution of capital. It is strenuously urged by the learned Advocate-General who appears for the Commissioner of Income-tax that this arrangement, though it appears in a document styled a deed of partnership, is in reality an arrangement whereunder the ice manufactured by the six factories mentioned in the deed is to be pooled together for the purpose of sale. Strong reliance has been placed on clause 1 referred to above. It is no doubt true that under clause 1 the partnership was to....
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....hem as and when the moneys on sale of their respective goods were recovered and received by the partnership. Much has been made of this provision and it is urged that by reason thereof the effect of the provision relating to the purchase of ice by the partnership has been nullified and that there was to be in fact no purchase of any ice by the partnership from the parties mentioned in the deed. It is urged that the so-called price of the ice puported to be sold to the partnership was to be paid "as and when the moneys on the sale of their respective goods are recovered and received by the partnership". It is urged that these words indicate that it was only when moneys were recovered and realised in respect of the goods of the various partie....