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TMI Blog1982 (11) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Any of the partner or partners shall have the right to retire from the partnership by giving one month's notice in writing to the other partners of his/her intention so to retire and the partner or partners so opting to retire shall be entitled to the moneys standing to his/her/their credit including the profits and losses upto the date of his/her/their retirement less moneys due by him/her/them to the firm and shall not be entitled to or to have any right over the goodwill of the firm. 15. Death or retirement of any of the partner or partners shall not operate to dissolve the firm but the surviving or remaining partner or partners shall carry on the business as a firm and the money due to the deceased or retiring partner or partners s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able at the Will of the partners." The profit sharing ratio was set out in cl.10. Each of the partners, excepting Mr. A.J. Lopoz and the minor admitted to the benefits of partnership, were entitled to 16% share in the profit and 17% in the loss. The minor was entitled to 10% of the profit and was not liable for the loss. A.J. Lopoz, the first partner, was entitled to 10% of the profit and 15% in the loss. According to cl.11 the accounts were to be closed on the 31st July every year and profit and loss account has to be drawn up. In due course, the accounts were made up and what happened for that allocation of profit was made upto 12th March, 1974 according to the profit sharing ratio set out in the earlier deed of 1st August, 1970 and fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmissions. There was a firm of six partners constituted under the deed of 1st August, 1970. One of the partners, Mrs. Rosy Clement Lopoz died on 15th February, 1974. According to cl. 15 of the deed dt. 1st August, 1970, which we have already set out, the firm would not dissolve but the surviving partners to carry on the business as a firm and the share of the deceased partner was to be made upto the date of her death and was payable to the legal heirs. Therefore, what happened is that the deed of 1st August, 1970 did not come to an end on the demise of Mrs. Rosy Clement Lopoz on 15th February, 1974, but the deed continued. Thereafter, on 13th March, 1974 the deed reconstituting the firm was drawn up. This deed, no doubt, mentions that as f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conformity with the instrument of partnership is clear from the provisions of s. 271(4) which states as under: "If the ITO or the AAC or, the Commissioner (A) in the course of any proceedings under this Act, is satisfied that the profits of the registered firm have been distributed otherwise than in accordance with the shares of the partners as shown in the instrument of partnership on the basis of which the firm has been registered under this Act, and that any partner as thereby returned his income below its real amount, he may direct that such partner shall, in addition to the tax, if any, payable by him, pay by way of penalty a sum not exceeding one and a half time the amount of tax which has been avoided, or would have been avoided if ..... X X X X Extracts X X X X X X X X Extracts X X X X
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