Judgment

HIDAYATULLAH J. : The Commissioner of Income-tax has filed this appeal, with special leave, against the judgment and order of the High Court of Bombay, by which the High Court answered two questions referred to it in favour of the respondents, Messrs. Dwarkadas Khetan & Co., Bombay. These questions were :

"(1) Whether the instrument of partnership dated 27-3-1946 created a deed of partnership?

(2) If the answer to question No. 1 is in the affirmative, whether the fact that on 1-1-1946 there was no firm in existence would be fatal to the application for registration of the firm under S. 26A of the Indian Income-tax Act or whether the firm could be registered with effect from 26-3-1946 if it is held that the firm was genuine?"

2. Prior to 1st January 1945, there was a firm called Dwarkadas Khetan & Co. on that date, the firm ceased to exist, because the other partners had previously withdrawn and it came to be the sole proprietary concern of Dwarkadas Khetan. On 12th February 1946. Dwarkadas Khetan obtained the selling agency of Seksaria Cotton Mills, Ltd. On 27th March 1946, he entered into a partnership with three others by an instrument of partnership executed that day. Those