1987 (8) TMI 67

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.... at the instance of the assessee for answering the following questions of law : " 1. Whether, on the facts and in the circumstances of the case, the finding of the Tribunal that the partnership constituted by the karta and another member of the same Hindu undivided family and a stranger was not a valid partnership, so as not to be entitled to registration under section 185 of the Income-tax Act....

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....chand. On April 3, 1971, a fresh partnership deed was executed showing Ratanlal, his son, Vimal Kumar, and Gulabchand as partners. There was no partition between Ratanlal and his son, Vimal Kumar, and they continued to comprise a smaller Hindu undivided family of which Ratanlal as father was the karta. There was no investment of capital by Vimal Kumar in this partnership. The assessee-firm compris....

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....e Revenue that no valid partnership could be constituted in these circumstances. This has led to the reference for decision of the above questions of law arising out of the Tribunal's order. The point for decision is, whether a valid partnership can be constituted by the karta of a Hindu undivided family along with a stranger and another member of that Hindu undivided family. It is well-settled....

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.... a valid partnership, it is not necessary that each and every member should contribute to the capital. This being so, the mere fact that one of the partners, Vimal Kumar, did not contribute to the capital and was a working partner could not invalidate an otherwise validly constituted partnership. The Tribunal was, therefore, not justified in taking the contrary view. Consequently, the reference....