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TMI Blog1980 (3) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... to get profit at 40 per cent each, and the minor partners were to get the benefit of profit @ 10 per cent. 3. The ITO required the assessee to explain as to why registration may not be refused, because, the minor partners did not invest any capital or employed any skill. In reply, the assessee filed a detailed letter dt. 15th Feb., 1977 stating that the minor partners were not benamidars. The firm was genuine, and there was no material for coming to the conclusion that the registration cannot be granted. The ITO was not satisfied with the explanation. According to him, the minors did not contribute any capital. They also did not render any service in the partnership. So, according to him, both the minor partners were benamidars. Thus, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C that the profits, in reality, were enjoyed by the major partners. The ld. counsel also contended that the firm carried on business in the year of account, in accordance with the partnership deed. So, the ITO has no material for coming to the conclusion that the firm is not genuine. 6. The ld. Deptl. Rep. Supported the order of the AAC, and contended that in the present case, the minors became co-sharers in the firm's property, in view of s. 30 of the Indian Partnership Act. So, according to the ld. Deptl. Rep., there was a transfer of the share of property of the firm in the names of the minors. It was also contended that the minors have not contributed any capital or they also did not render any service. So, the authorities below right ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ited in the names of the partners at the close of the accounting year. There is no evidence on record to show that ultimately, the profits credited in the names of the minors were really enjoyed by the major partners. In the present case, the Dept. failed to discharge the initial onus which lay upon it. Looking to the aforesaid facts, and the evidence on record, I am fully satisfied that in the year of account, a valid partnership was in existence. The assessee carried on business in the year of account, in accordance with the partnership deed. The profits were divided in accordance with the profit sharing ratio mentioned in the partnership deed. So, there is no justification for holding that the two minors were benamidars of other major pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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