9911796707
TMI Blog1977 (1) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... shed; (ii) There is a void in the loss sharing ratio. For assessment year 1974-75, the assessee only sought the effect of registration in previous assessment year. For assessment year 1975-76, the assessee in addition to the effect also asked for registration without the original partnership deed. But the Income Tax Officer did not condone the delay in the application for registration The Appellate Assistant Commission agreed. 2. We settle the following two points for our decision: (i) Whether the assessee applied for registration in respect of assessment year 1973-74? (ii) Whether there is a void in the loss sharing ratio? 3. Point(i) : In the covering letter to the return for the assessment year 1973-74 furnished on 26th Ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad been furnished. Therefore, the assessee was assessed as an unregistered firm. The Appellate Assistant Commissioner agreed. 4. It is the admitted position in the case that there is no direct evidence to support the case of the assessee. The fact that the application is not seen in the Income Tax Officer is not conclusive of the issue that it was not sent by the assessee. When a fact is in dispute and direct evidence is not available, attendant circumstances have to be looked into. Circumstantial evidence was available in this case. If that had been taken into consideration, it is clear that the case of the assessee is established. The Income Tax Officer or the Appellate Assistant Commissioner did not even look into the effect of the ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lue of this relevant conduct in furnishing only Form No.12 in July, 1974 before the question became a fact in issue, the departmental representative argued that it might have been intentionally done to build up a case for the assessee. Now let us test the soundness of this argument. The argument of the departmental representative to support the case of vicious design on the part of the assessee in furnishing only Form No.12 is that for assessment year 1974-75 when it was about to furnish the return it must have realised that application for registration had not been furnished within the relevant period of time i.e., before 1st Jan., 1974, the expiry of the relevant accounting year and therefore, in its feverish attempt to cover up the omiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a device and seek registration. The assessee would have ordinarily waited to furnish an application for registration for the next assessment year. The assessee did not lose anything by lack of registration for assessment year 1973-74. The net profit returned was only Rs.99. The assessed income is only Rs.2,000 and odd. The assessment was closed as "Nil assessment" even with the status of an unregistered firm. So when there was no necessity to get registration, the assessee would not have ordinarily resorted to such a fraud. It is only a remote possibility. So we cannot accept that line of argument. So the attempt of the departmental representative to belittle the evidentiary value of the conduct of the assessee has not succeeded. So on a co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partnership deed are as follows: "6. The capital shall be Rs. 80,000 (Rupees eighty thousand only) whereof a sum of Rs. 40,000 (Rupees forty thousand only) shall belong to the first party, Rs. 20,000 (Rupees Twenty thousand only) to the minor admitted to the benefits of the partnership. 7. Profit or loss of the partnership shall be divided among the parties as well as the minor admitted to the benefits of the partnerships in proportion to their capital, provided that the liability of the minor shall be limited, as contemplated in s. 30 of the Partnership Act, 1932. The share of profit due to the minor shall not be withdrawn till he attains majority and they will bear interest at 12% per annum." Two partners are majors, the other t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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