9911796707
TMI Blog1982 (10) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... r partners, namely, Sh. Anil Kumar Jain and Sh. Sukhmal Jain were admitted as partners. A fresh partnership deed was executed on3rd November 1975giving effect to the above change. In respect of the asst. yr. 1977-78, the assessee filed a return of income in the status of registered firm on20th January 1978declaring an income of Rs. 45,227. Along with the return, the assessee filed two statements. In the first statement income for the period4th November 1975to16th January 1976at Rs. 6,129 was worked out and this was distributed among the erstwhile three partners. namely, S/Sh. Dewan Chand, Manoharlal and Mohan Lal. In the second statement income for the period17th January 1976to22nd October 1977was worked out at Rs. 39,097 and this was distr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the firm. It was pleaded that unfortunately, due to the mistake of the munim, the pro rata profit till 17th January 1976 was credited to the account of the retiring partner Sh. Dewan Chand under the mistaken belief that the latter continued to be a partner in the firm till he died on 17th January 1976. It was contended that the profit of the two periods, i.e., before and after the death of Sh. Dewan Chand was worked out wrongly by the munim separately on ad hoc basis and profits upto the period of Sh. Dewan Chand s death was allocated as per old partnership deed and the profits for the subsequent period was allocated as per the terms of the new partnership deed and this action on the part of the munim was completely unauthorised and contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary 1976. Therefore, this declaration clearly shows that the firm comprising of aforesaid three partners continued to exist with no change in constitution or the share of partners upto17th January 1976. A declaration of this type cannot surely be a mistake committed by the Accountant. Therefore, this action of the assessee, alone, leads to the conclusion that the firm comprising of the aforesaid three partners continued to exist upto 17th January 1976 and, therefore, leads to the conclusion that no new firm comprising of four partners S/Sh. Manoharlal. Mohanlal, Anil Kumar and Sukhmal Jain purportedly having come into existence vide deed of partnership executed on3rd November 1975, came into existence. The fact that the appellant firm conti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce the profits in respect of this period were not divided in accordance with the deed of partnership and he had no objection if the firm is treated as unregistered for this period. Another point made out by the ld. Counsel before us was that the assessment of one of the partners of the firm namely Sh. Manoharlal was completed by the ITO on 9th February 1978 by taking the share of income as allocated to his account and hence, subsequently, registration could not be refused to the firm in view of the ratio of the decision reported in CIT vs. Blue Mountain Engineering Corporation (1978) 112 ITR 839 (Mad). However, the ld. Counsel did not press this argument any further. In this connection he also drew our attention to a decision of the ITAT, H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and even an intimation was sent to the Registration of Firms in August, 1976. We also find that in respect of the asst. Yr. 1978-79, registration has been granted to the firm by the ITO himself. All these facts clearly go to establish that there was a genuine firm in existence with 4 partners during the period17th January 1976to22nd October 1976. As regards the earlier period, i.e., 4th November 1975 to 17th January 1976, apart from the contention of the ld. Counsel, we find that since the profits in respect of this period were not distributed in accordance with the terms of the partnership deed dt.3rd November 1975, the firm is not entitled to registration for this period and we hold that in respect of this period, the firm should be treat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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