2003 (9) TMI 13 - HC - Income Tax

Firm - Whether Tribunal was right in holding that M/s. Hazarimal Milapchand Soorana and M/s. Mannalal Nirmal Kumar Soorana and Company could not in law be treated as one firm for the purposes of assessment? - The registration of the firm cannot be refused or the firm cannot be treated as just benami of the assessee-firm only on the ground that the partners and business thereof are common. When the books are separate the partners have contributed capital and books of account are not rejected in the case of Mannalal Nirmal Kumar Soorana and Company in these facts we fail to understand how the firm Mannalal Nirmal Kumar Soorana and Company can be treated as just an extension of the assessee-firm Finding of Tribunal that M/s. Mannalal Nirmal Kumar Soorana and Company is an independent firm and not an extension of M/s. Hazarimal Milapchand Soorana cannot be disturbed

Summary

The High Court of Rajasthan held that M/s. Mannalal Nirmal Kumar Soorana and Company is an independent firm and not an extension of M/s. Hazarimal Milapchand Soorana. The court found that the separate registration numbers and evidence supported the independence of the firms. The court ruled in favor of the assessee and against the Revenue.