OM PRAKASH, C.J. At the instance of the Revenue, the Tribunal referred the following question relating to the asst. yr. 1987-88 for the opinion of this Court:
"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 or the privilege to and 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. The assessee, a partnership firm, is engaged in the business of Abkari. The assessee sought registration which was denied on the ground that the licence was Ai the name of one of the partners only and not in the name of the firm as such.
3. The Tribunal in the second appeal held that though the Abkari licence was obtained by one of the partners, the same was transferred to the assessee-firm by the partner. This is how the Tribunal did not see anything reflecting upon the genuineness of the firm. The Tribunal, therefore, held that the firm was genuinely constituted and was entitled to registration.
4. On similar stipulations made in the Abkari licence and on same legal provisions, a Full Bench of this Court in K.S. Ramakrishnan, P.K. Narayanan & Co. vs. CIT (1996) 134 CTR (Ker) 105 (FB) : (1997) 223 ITR 209 (Ker) (FB) , held that under the Abkari Act and the Rules framed thereunder, the Government wanted to restrict the rights of individuals dealing in liquor to the licensees and licensees only. When the licensee is granted such a personal privilege, he cannot be allowed to share that privilege with others.
5. The effect of the above authority is that the Abkari business was not transferable and, therefore, the firm could not be said to be genuinely constituted to carry on the Abkari business under the licence issued in the name of one of the partners.
Following the aforesaid Full Bench decision, we answer the abovementioned question in favour of the Revenue and against the assessee.
OPEN