9911796707
TMI Blog1978 (7) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... t preferred the appeals to the AAC against both these orders. In the quantum appeal, the AAC deleted the addition of Rs. 11,930 as a result of which the total income assessed was reduced to Rs. 30,098. The AAC, however confirmed the refusal of registration by the ITO under s. 185(1)(b) and r/w s. 185(5) of the Act. Being dissatisfied with these orders of the AAC, the appellant has preferred the present appeals to the Tribunal. 5. Shri Malik, the learned counsel for the appellant fairly conceded that the appellant had not filed any petition under s. 146 of the Act and as there was not much difference between the income returned by the appellant and the income as finally determined by the order of the AAC, there was no further relief due to the appellant in the quantum appeal. In this view, we dismiss the appellant's quantum appeal in I.T.A. No. 5251 (Del.)/76-77. 6. In the registration appeal, Shri Malik submitted, that there was no justification for the Departmental authorities to refuse registration to the appellant firm which was genuine and which had complied with all the formalities of law for obtaining such registration. He pointed out that the charging of interest on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the exparte assessment under s. 144 of the Act without objecting to the same under s. 146 of the Act, the Departmental authorities were justified in refusing registration to the appellant under s. 185 (5) of the Act. He relied on the orders of the authorities below and contended that the business of the partnership was not carried on in conformity with the terms and conditions stipulated therein and that particularly cl. 3 of the deed was not adhered to. He further submitted that the minors had been made full fledged partners when they were required to contribute capital of Rs. 25,000. He further pointed out that the deed of partnership was not a legally valid document since it was not attested by two witness as required by law. He also submitted that the Circular of the Central Board of the Direct Taxes, relied upon by the appellant would not be applicable to the facts of the present case and that the refusal of registration by the Departmental authorities was fully justified. 8. We have carefully considered the rival submissions of parties in the light of the materials placed before us. 9. A perusal of the deed of partnership dt.15th March, 1973shows that the appellant was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amounts specified in cl. 3 was raised by the firm from the partners then such additional capital would bear interest at 12 per cent per annum. We are unable to agree with the learned counsel that cl. 3 stipulated interest being allowed on the entire capital of the partnership nor are we impressed by the argument that the adult partners had agreed to charge such interest on capital accounts as could be seen from the declarations made by them before the ITO. A copy of this declaration is at page 5 of the paper book. It is dt.25th July, 1976and was made by Smt. Snehalata. A perusal of this declaration shows that it was mutually decided at the time of finalisation of their accounts for the year ending31st March, 1976that interest should be charged on the capital investments of the partners as and from1st April, 1973. Obviously, this declaration which came into existence much later in 1976, could be of no avail for charging of interest in the year of account three years earlier. We therefore reject these two contentions urged by the learned counsel for the appellant. However, the learned counsel is right in his submission that Shri Shiv Ratan did not contribute any capital and that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a well settled position in law. Applying the above principle to the deed of partnership dt.15th Dec., 1973, there can hardly be any dispute that the two minors were only admitted to the benefits of partnership and were not made full fledged partners as contended by the Revenue. 15. The argument of Shri H.K. Lal, for the Revenue that the absence of attestation by two witnesses would be fatal to the legal validity of the instrument of partnership is not supported by any authority. We are not aware any legal requirement insisting upon the attestation by two witnesses of signatures of the partners in a deed of partnership for its legal validity and binding nature. On the contrary, the parties to the document have accepted and acted upon it by carrying on business in accordance with the terms and conditions specified therein. We are, therefore unable to accept this contention of the Revenue. 16. The main objection of the Revenue is that the assessee has accepted the best judgment assessment under s. 144 of the Act and that, therefore the Departmental authorities would be justified in refusing registration under s. 185 (5) of the Act. Obviously, this argument over-looks that under ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
