JUDGMENT

OJHA, J.:- This appeal by special leave has been preferred against thejudgment dated 22nd July, 1975 of the Bombay High Court in I.T. Ref. No. 95 of 1965 made under Section 66(1) of the lodian Income-tax Act, 1922. The assessment year under reference was 1961-62. 68

2. Chandrakant Manilal Shah was the Karta of a Hindu undivided family (HUF) and the family was carrying on business of cloth. Naresh Chandrakant, one of the sons of Chandrakant Manilal Shah, joined the business on a monthly salary of Rs. 100/- since about April, 1959. It was asserted that with effect from I st November, 1959 the business had been converted into a partnership between Chandrakant Manilal Shah as Karta of HUF and Naresh Chandrakant. The deed of partnership executed in this behalf of 12th November, 1959 indicated that Naresh Chandrakant had been admitted as a working partner with effect from I st November, 1959 having 35 per cent. share in the profits and losses of the firm and the remaining 65 per cent. share was held by Chandrakant Manilal as the Karta of the HUF. An application was made for registration of the firm which was dismissed by the Income-tax Officer on the ground that there was no vali