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TMI Blog1986 (4) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... eath of Lala Kalu Ram on9-6-1981and Jeth Nand, partner deciding to opt out from the said date, Bhim Sen was inducted by the remaining two partners, namely, Shri Yash Pal and Shri Prem Kumar. Fresh registration application dated23-9-1981filed in Form No. 11 on the basis of partnership deed executed on22-6-1981. It is stated by the ITO that the original partnership deed was furnished. As per the deed of22-6-1981, the profits/losses of the partnership business were to be shared by the partners in the following proportion : Shri Yash Pal 34 per cent Shri Prem Kumar 33 per cent Shri Bhim Sen 33 per cent 3. A return declaring income of Rs. 34,920 was filed on 30-6-1982, which was accompanied by statement of income, trading accounts, profit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specified constitution. For this approach, he relied on the judgment in the case of Setha Ram Dhanvir Singh v. CIT [1980] 123 ITR 150 (All.). 6. Shri C. S. Aggarwal for the assessee referred me to the following judicial pronouncements and submitted that the facts in the case of Setha Ram Dhanvir Singh, on which reliance was sought to be placed by the AAC being peculiar, could not govern the present case Lakhpat Rai Des Raj v. CIT [1977] 107 ITR 440 (Punj. & Har.) Addl CIT v. Mardan Khan Rafiq Ahmad Khan [1978] 115 ITR 559 (All.)., CIT v. Hari Ram Khanna [1979] 116 ITR 886 (All.) and ITO v. Raghbir Chand & Co. [1977] Tax 49(6)-100 (Asr.). 7. For the revenue Shri S. P. Jain departmental representative very energetically supported the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 960. It disclosed that the share of Hari Ram was six an as and those of his two sons five annas each. The claim of partial partition was accepted by the ITO by an order datedAugust 18, 1966. For the assessment year 1962-63, the assessee-firm was granted registration. Subsequently the Commissioner passed an order under section 263 setting aside the assessment of the status of a partnership firm and directed the ITO to make the assessment afresh. The Commissioner found that though the application for registration was made in the proper form and within time, yet actually the division of shares of the profits was not made in accordance with the division of profit indicated in the partnership deed. The deviation was that Hari Ram Khanna instead ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inadvertently because the partner were the father and his two sons and ordinarily one can think that they would have equal shares.' It emphasizes that his deviation occurred subsequent to the making of the application. It expressed the opinion that even minor irregularity could have been covered by imposition of penalty under section 271(4) of the Act and therefore, it was not a case where registration could validly be refused on the finding that the firms is not genuine. The appeals were allowed." 11. The Hon'ble High Court dismissed the reference and held that the firm was entitled to registration. 12. Coming to the judgment, on which reliance is placed by the revenue, again Hon'ble Chief Justice Satish Chandra spoke for the Court and d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and 6 annas in favour of father and son in the account books allocation of profit was made in equal shares. The AAC in the first appeal confirmed the ITO's action but in second appeal, the Tribunal directed registration and the Hon'ble High Court held that the sole controversy in such cases would be whether a firm could be said to be vague and not entitled to registration simply because the shares of the partners in the profit were not distributed in accordance with the deed, on the basis of which registration claim was made and that the Tribunal decision in such matter would be finding of fact. 14. Keeping in view the above judicial pronouncement if we analyse the facts we find that in the present case Shri Yash Pal and Prem Kumar are r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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