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TMI Blog1986 (5) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... hem in the partnership deed, as the distribution of profits was one of the requirements for establishment of a genuine firm. It was after two or three years afterwards that the alleged correction was carried out but even the Tribunal vide its order dated 6-12-1984, refused to accept that it was only a mistake that the profits had been wrongly allocated amongst the partners and rather it came to the conclusion that the firm is not a genuine one. 3. Before us Shri Chaudhary, the learned counsel for the assessee, argued vehemently that notwithstanding the fact that the fact in the present year was the same as in the earlier assessment year a different conclusion could be arrived at and that the finding of one year cannot and would not be bin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd had issued a circular by placing reliance on the Patna High Court decision in the case of Purusottam Lal Kishorilal v. CIT [1978] 115 ITR 377 that the ITO should allow the assessee to seek a fresh registration by filing Form No. 11 as well as the partnership deed and not merely refuse the continuation of registration on the reasoning that in the earlier year the registration was refused. The Board's circular is reproduced in Sampath Iyengar's Law of Income-tax, Seventh edn., Vol. 4, p. 3891. The proper course for the ITO, as rightly submitted by the assessee's counsel, Shri Chaudhary, was to allow him to seek fresh registration. This was never thought of by the ITO. This apart, even if the ITO had to allow time for filing of Form No. 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ram Prem Chand was considering the question of the profits not being divided before the end of the previous year and the returns filed late whether registration should be refused or otherwise. This particular case would have no application to the facts of the present case before us for the reason that in that case the dispute was not that the profits had been distributed in a different manner from the one prescribed in the partnership deed, but the dispute was that the profits having not been distributed before the end of the previous year whether the firm could be treated as a genuine firm or not. Therefore, this particular case would have no application to the present case before us. Further the dismissal of special leave petition of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave clearly observed that the partner whose share was 60 per cent was credited only with 50 per cent of the profits to which the partner never raised any objection and that it is not at all believable that the partner is not aware of the profit that is credited to him and that too whether it has been done properly and in accordance with the partnership deed as the so-called mistake was allowed to continue year after year. 6. As already observed above in the present assessment year the facts are the same that the profits have not been distributed in accordance with the partnership deed and that the assessee has not brought in any new material for us to come to a contrary conclusion than the one taken by this Bench in the earlier year. One ..... X X X X Extracts X X X X X X X X Extracts X X X X
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