JUDGMENT

J. S. VERMA, J. —This appeal is by a certificate granted by the Andhra Pradesh High Court on the question as to "whether a sub-partnership which is alleged to be illegal as being in violation of Section 14, of the Abkari Act, can be registered under the Income-tax Act." The impugned judgment of the High Court is reported in (1978) 111 ITR 93 : (1977 Tax LR 244). The decision of the High Court was rendered in a reference made by the Income-tax Appellate Tribunal, Hyderabad bench under Section 256 (1) of the Income-tax Act, 1961 at the instance of the revenue for opinion on the following question of law, namely,

"Whether, on the facts and in the circumstances of the case, the sub-partnerships are entitled to the benefits of registration under the Income-tax Act, 1961, for the assessment year 1964-65?"

The High Court answered the question in the affirmative in favour of the assessee and against the revenue. Hence this appeal by the revenue on certificate granted by the High Court.

2. The material facts are : For the relevant assessment year a partnership by name "Nizamabad Group Sendhi Contractors" was formed under a deed of partnership dated October 15, 1962 with 17 partners on