9911796707
TMI Blog1983 (7) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... 1964, was doing business in manufacture and sale of steel articles like security equipments, office equipments, franking machines and other steel products. Registration had been duly granted. Shri L. Alagappan, whose mother and wife are partners in the firm, was for some years the general manager of the firm. There was a general insurance agency in his name. Under some agreement between him and the firm to the effect that he is only a nominee for the firm, the commission which was earned in that line of business was being returned by the firm as its income from 1969 onwards and assessed on that basis. The assessee from the assessment year 1973-74 onwards stopped its business in steel products. The only income returned and assessed thereafte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me. The AAC has made it clearer still by stating that, for these years in which commission income alone is returned, the business activity is not carried on by all the partners or any of the partners concerned acting for all and that, therefore, no business is carried on by the firm for these years within the meaning of the Partnership Act. 5. The income-tax authorities are clearly wrong in the view they held. Section 186 is inapplicable to the case. There is a genuine firm in existence as before. It has not been dissolved. Nor has it undergone any change in the constitution. So there is a genuine firm in existence as registered. So long as there is a genuine firm in existence as registered, it is not permissible to invoke section 186. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the firm is not carrying on the business activity. Alagappan is, therefore, acting under the control and direction of the partnership. The work is done under the supervision of the firm. That supervision, control and direction exercised by the firm constitute its business activity. When it is admitted that Alagappan is only a nominee of that supervision, control and direction is inherent and implied in the case. Instances of such activities of supervision, control and direction need not be cited, quoted or proved. That all stands proved by proper and legitimate inference drawn from the facts and circumstances of the case. So we hold that the firm is carrying on business activity, when the insurance commission was paid by the insurance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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