1969 (2) TMI 26 - HC - Income Tax

Partnership - registration - firm was the owner of the lorries and operating them, the partnership cannot be regarded as illegal merely because the permits in regard to them stood in the names of their original owners - refusal of renewal of registration under section 26A is not justified

Summary

The High Court of Madras ruled in favor of the assessee-firm for the assessment years 1960-61 and 1962-63. The Tribunal found that the firm operated lorries without valid permits, leading to cancellation of their registration. However, the Supreme Court's judgment on benami transactions supported the firm's ownership of the lorries despite permits being in the original owners' names. The court held that the firm's operation was not illegal, and the refusal of registration renewal was unjustified. The judgment favored the assessees with costs.