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1964 (4) TMI 16 - SC - Income TaxWhether the finding of the Appellate Tribunal was one of fact and that the High Court had no jurisdiction to canvass the correctness of its finding on a reference made under section 66(2) of the Act? Whether the conclusion arrived at by the Tribunal was the correct one and the High Court erroneously interfered with it? Held that:- The Tribunal mixed up the two concepts, viz., the legality of the partnership and the ultimate destination of the partners' profits. It also mixed up the question of the validity of the partnership and the object of the individual partners in entering into the partnership. If to avoid a legal difficulty 5 individuals, though four of them are members of different firms, enter into a partnership expressly to comply with a provision of law, we do not see any question of fraud or genuineness involved. It is a genuine document and it complies with the requirements of law. It is not an attempt to evade tax, but a legal device to reduce its tax liability. The fact that all the partners of all the firms did not exceed 12 in number and if they chose all of them could have entered into the partnership indicates that there was no sinister motive behind the partnership. As the Tribunal misconstrued the provisions of the partnership deed and relied upon irrelevant considerations in coming to the conclusion it did, the High Court rightly differed from the view of the Tribunal. In the circumstances, in view of the decision of this court in Sree Meenakshi Mills' case [1956 (9) TMI 1 - SUPREME Court] a question of law within the meaning of section 66(2) of the Act arose for decision. The High Court rightly answered the question in the negative. Appeal dismissed.
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