9911796707
TMI Blog1992 (3) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... he indication was only in Form NO. 12A qua DKB Co. In which the assessee is a partner entitled to 16 per cent share. The ITO in the personal assessment of the assessee took the share income from DKB Co. At 16 per cent. At the same time, in the assessment of Vinayaka Traders, 8 per cent share of income from DKB Co. through the assessee was included and from such included income there was allocation to the assessee at 38 per cent in respect of his income in Vinayaka Traders as in Vinayaka Traders, the assessee had 38 per cent share. The assessee's grievance before us is that he was only having 8 per cent (share in the profit of DKB Co., in his own right the other 8 per cent share in DKB Co., he held as a benamidar of) Vinayaka Trade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Divakaran, (5) N. Dharmarajan (6) A. Dharmarajan (7) K. Gangadharan who was not a partner of the said firm Date: 23rd April, 1986. Signature Address 1. K Damodaran 7. G. Anandarajan ............. ............. 2. N. Krishnan 8. N. Subhakaran ............. ............. 3. R Bharathan 9. G. Somarajan ............. ............. 4. R Sadanandan 10. J. Sasikumar .............. .............. 5. T K Chandramohan 11. K. Bhaskaran .............. .............. 6. N Bharatharajan 12. S. Sukumaran .............. .............. . 13. G Gopi . ..... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made. Thus, by virtue of the Explanation to s. 185 if the benami relationship is declared in the prescribed manner, the firm has to be treated as genuine. It is seen from the records that DKB Co. In which the assessee was a partner in his own right as also benamidar of Vinayaka Traders, had made such fact known to its assessing authority in the prescribed manner. Perhaps that is the reason why DKB Co. Was granted registration. The authorities below took the view that because there was no mention of such declaration in the assessment order of M/s DKB Co. and also because the apportionment of profit to the partners of M/s DKB Co. In its assessment order did not spell out the dual capacity of Sri Subhakaran, it was not open to the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um of Rs. 2 lakhs as investment in DKB Co. And had also taken in its accounts credit for 50 per cent of the share amount received by the assessee from DKB Co. Vinayaka Traders is a partnership firm formed for the purpose of carrying on Abkari business and foreign liquors. The partnership firm DKB Co. Was also carrying on by in Abkari and foreign liquors. Thus, the business of the two firms is of the same nature. Sec. 16 of the Partnership Act is relevant in this context and is as follows: "16. Personal profits earned by partners.— Subject to contract between the partners—(a)if a partner derives any profit for himself from any transaction of the firm, or from the use of the property or business connection of the firm or the firm na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vent of benami transaction, the provisions of the Benami Transactions (Prohibition) Act, 1988 would come into play and, therefore, such relationship cannot be recognised by the Tribunal. We have gone through the provisions of the Benami Transactions (Prohibition) Act, 1988 (hereinafter called as "the Act"). Sec. 3 of the Act prohibits entering into benami transactions except in certain cases. Sec. 4 is as follows: "4. Prohibition of the right to recover property held benami.— (1) No suit, claim or action to enforce any right in respect of any property held benami against the person in whose name the property is held or against any other person shall lie by or on behalf of a person claiming to be the real owner of such property. (2) No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property. The prohibition is against the real owner only. In other words, the ostensible owner is made the beneficial owner as against the letter. By virtue of s. 7 of the Act, provisions of s. 281 A of the IT Act which contained similar provisions as in ss. 4(1) and 4(2) of the Benami Transactions (Prohibition) Act, 1988 stands repealed, but the Expln. 1 to s. 185 does not stand repealed. Nor has it been deleted in the IT Act, 1961. Nor the Benami Transactions (Prohibition) Act, 1988 overrides the provisions of IT Act or the provisions of s. 16 of the Partnership Act or the provisions of s. 88 of the Indian Trust Act. In this view of the matter, we hold that merely because a partner happens to be a benamidar of an outsider registration can ..... X X X X Extracts X X X X X X X X Extracts X X X X
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