9911796707
TMI Blog1975 (2) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... persons namely Munnasingh, Amritsingh. Arjunsingh and Krishnarao, for carrying on a similar business in the purchase and sale of tobacco. Clause 3 of the Deed of partnership provided that Malkhansingh was to be the working partner and that he need not contribute any capital to the partnership and that the other four partners will each contribute Rs. 5,000 towards capital. The total capital of the partnership was thus fixed at Rs. 20,000. Clause 8 of the Deed of partnership provided that Malkhansingh, in view of the experience in this line of business, would look after the conduct of the business such as purchases and sales, banking transactions, issues and recoveries connected with the business etc. It was claimed on behalf of Malkhansingh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITO was not right in holding the "HUF" to be the owner of such share income. He pointed out that Malkhansingh had not contributed any funds belonging to the "HUF" by way of capital in the firm, that the loans given by the "HUF" to the firm were ordinary commercial loans on which interest was charged; that the decline in the turnover of the "HUF", immediately after the firm came into being was not due to the transfer of the business by the HUF to the firm but was due to the ill health of Malkhansingh and that in the subsequent year namely 1975-76, the business of the HUF had gained progress and that having regard to the totality of circumstances, there was no material to hold that Malkhansingh entered the partnership on behalf of his "HUF". ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest. On going through the deed of partnership, it is also clear that the deed of partnership, did not stipulate that Malkhan Singh or the HUF should provide such finance to the firm. Thus in could hot be said that the loans advanced by the HUF to the firm had any nexus with the Agreement under which Malkhansingh became a partner of Vijay Co. It could not be said be the same reasonable that Malkhan Singh become a partner in the firm "by determent" to the family funds. The loans given by the HUF would, in the context of event, be considered only as ordinary commercial loans given by it to the firm. 7. The other reason given by the ITO for holding Malkhansingh to be a Representative of his HUF is that the firm was being carried on onl ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
