JUDGMENT
V. V. KAMAT J.-On identical questions only yesterday this court had an occasion, relying on the Full Bench decision of this court, in Narayanan and Co. v. CIT [19971 223 ITR 209 (Ker) [FB] ; [19961 KLJ (Tax Cases) 154, to follow to answer identical questions in 1. T. R. No. 42 of 1993. The said identical questions are as follows :
“1. Whether, on the facts and in the circumstances of the case and where a partner obtains a licence and carries on the business of abkari contracts, the Tribunal is right in law in holding,-
‘(i) it cannot be said that the concerned partner has transferred the licence of the privilege to aid in favour of the partnership firm of which he is a partner ?
(ii) such transfer, if any, is not prohibited under the Abkari Act ?’
2. Whether, on the facts and in the circumstances of the case, the assessee is entitled to be treated as a registered firm under the Incometax Act ?”
This is a case of a partnership firm of six partners doing business as Abkari contractors. The partnership deed is dated April 1, 1986. The application for registration relating to the year 1987-88 submitted by the said partnership firm was refused on the ground that the licence stood in the name of one of the partners. The Full Bench decision of this court Narayanan and Co. v. CIT [19971 223 ITR 209 ; [19961 UJ (Tax Cases) 154 has decided that such a contract of partnership is void under section 23 of the Contract Act and as such cannot be recognised as a genuine partnership firm with reference to the proceedings under the Income-tax Act, 1961. In the process of reasoning it is observed, that the said partnership is against the Abkari Act as it is hit by the provisions of rule 6(22) of the Rules. This is in view of the fact that the licence could be understood to be belonging to the licensee in regard thereto solely and cannot be understood, after the formation of the partnership,to be subject to the rights of other partners in regard thereto. As stated above we have followed the said decision.
Learned counsel Shri P. Balachandran attempted to state that the two decisions of the apex court relied on above by the Full Bench are thought to be requiring reconciliation by the apex court itself. Be that as it may, however, if it is so, the position is governed by the Full Bench binding on us. For the above reasons, we answer the above questions in the negative in favour of the Revenue and against the assessee.
A copy of the judgment under the seal of this court and the signature of the Registrar shall be forwarded to the Income-tax Appellate Tribunal, Cochin Bench, as required by law.