9911796707
TMI Blog1986 (3) TMI 136X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that Shri Natarajan expressed his desire to retire from 1-10-1980 and his share will be taken over by the first partner Mrs. Padma with retrospective effect from 1-10-1980. The assessee filed application in Form Nos. 11 and 11A on 12-1-1981 for registration. The ITO held that the firm is not entitled to registration under section 185(1) (a) of the Income-tax Act, 1961 ('the Act'). When Shri Natarajan retired, no further deed of partnership in the requisite stamp paper of Rs. 100 was executed by the partners. Instead only an agreement on a stamp paper of Rs. 5 was executed. Moreover, the accounts of the firm were not closed on 30-9-1980 to profit and loss account. They were continued and closed to profit and loss on 15-1-1981. The accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The agreement executed on 6-1-1981 cannot be given retrospective effect from 1-1-1980 and the first partner cannot take over the share of Shri Natarajan from 1-1-1980. The said agreement executed on a stamp paper of Rs. 5 cannot be treated as a deed of partnership. Apportionment of profit or loss was not in accordance with the deed of partnership filed along with the application for registration. The decision of the Calcutta High Court has no application to the facts of this case. On the other hand, the decision of the Gauhati High Court in Jain Co. v. CIT [1978] 115 ITR 68 is directly on the point. Thus, he urged that the assessee is not entitled to registration. The learned counsel for the assessee supported the order of the AAC. He ur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from 1-10-1980. Thereafter, his share can be taken over by Mrs. Padma only from that date but not with retrospective effect from 1-1-1980 as given under this agreement. This clause giving retrospective effect from 1-1-1980 is not valid. The profit or losses up to 30-9-1980 have to be allocated as per the partnership deed executed on 1-1-1980 but that has not been done in this case. Thus, the assessee is not entitled to registration as the partners have not acted according to the partnership deed dated 1-1-1980. No doubt the genuineness of the firm is not doubted and the application in Form Nos. 11 and 11A has been signed by the existing partners. By that alone registration cannot be granted as the assessee is not entitled to registration f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification are (i) the deletion of the name of Shri Sukumar Jain, and (ii) the raising of the shares of each partner to 25 per cent in the profits and the modifications will be operative with effect held that this memorandum obviously is not a deed of partnership but is rather a document showing a change in the constitution of the firm. Although the partnership deed dated 1-2-1964 was an instrument of partnership, the firm constituted by that instrument has not been sought to be registered by the application made under rule 22 of the Income-tax Rules, 1962 read with section 185. Thus, it was held that the application for registration did not fulfill the requirements under section 184(1) (i) of the Act. The ratio laid down therein squarely ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
