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TMI Blog1978 (7) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... ed majority in Nov., 1973, and elected to become a partner of the firm. Consequently, a fresh partnership deed was executed on 1st Dec., 1973, with Balkrishna Agarwalla, Smt. Ramkumari Devi Agarwalla and Shri Jagadish Prasad Agarwalla as partners and admitting the three other minors mentioned above to the benefits of the partnership. This deed further stated tht it shall have effect on and from 1st day of April, 1973, the cover the financial year 1973-74 which is the previous year for the asst. yr. 1974-75. 3. ITA No. 43 (Gau.) of 1977-78 related to the firm Prodhan Chhaganlal. This firm was originally constituted by a deed dt. 1st Dec., 1970 with Chhaganlal Bhattar, Durgadutt Bhattar, Shyamlal Bhattar and Harikishan Bhattar as partners a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unts were drawn up only at the end of the year, the profit sharing ratio is applied only at the time of making up the accounts by which date the new partners were majors and could share the losses. He, therefore, directed the ITO to grant registration. 6. The Revenue has appealed and it was contended that the order of the AAC are erroneous and that he had approved a document by which a person who was a minor had been made a partner of a firm which was contrary to law. It was pointed out that the document had retrospective operation and thus contravened the basic requirement that a partner should be capable of being a partner by being a major at the time of forming the partnership. It was thus submitted that the orders of the AAC should be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration against realities. For example, a partnership deed cannot be deemed to have commenced from a date prior to the actual date on which the partners agreed to commence business or prior to the date on which the partners actually came together. But a document can be executed later conforming a factual or legal position which obtained earlier. On the other hand, the legal fictions can be created by legislation. In the instant case, s. 30(7) of the Indian Partnership Act creates a fiction in that it takes a minor who has elected to become a partner liable for loses from the date on which he was admitted to the benefits of partnership even though during his minority and admission to the benefits of partnership no minor is liable for losses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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