9911796707
TMI Blog1984 (7) TMI 196X X X X Extracts X X X X X X X X Extracts X X X X ..... tnership and, therefore, the share allocated to each partner was not entirely his income. The ITO took the view that in these circumstances each partner must be considered to be a benamidar of his partner in the sub-partnership to the extent of the share of other sub-partner. The assessee had not given an intimation in Form No. 12 A in accordance with r. 24A. The ITO therefore, held, by invoking the Expln. to s. 185(1) that the firm is not a genuine firm and therefore, not entitled to registration. The assessee claimed before the ITO that no question of benami is involved in the case of a sub-partnership, that there is vested in the sub-partner an overriding title in respect of the share to which be is entitled in the income of the partner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same contentions are raised It is further submitted that a sub-partnership is well recognised in law and there is no question of treating the sub-partnership as a benami transaction. It is submitted that under the law the sub-partner has an overriding title to the extent of his sub-partner's share in the share of the main partner in the main firm. Since this cannot be considered to be a benami transaction, there is no requirement of complying with the provisions of the Expln. to s. 185 of the Act and r. 24A. In the alternative, it is pleaded that in view of the circumstances and the controversial nature of the main question involved, viz,, whether a sub-partnership can be considered to be a benami transaction the ITO should have afforded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 ITR 204 (SC), CIT vs. Hukumchand Mannalal Co. (1970) 78 ITR 18 (SC) and CIT vs. Chandar Bhan Har Bhojanlol (1966) 60 ITR 188 (SC), that a firm would be entitled to registration although a partner may divide his share of profits with others, for example, the sub-partners or members of any firm. The relation between a partner in the firm and his sub-partner cannot be considered to be the same as the relation between a benamidar and the real owner. In the case of benami holding the real owner will have to set up his claim against the benamidar, if the benamidar repudiates the ownership of the real owner. A sub-partnership arrangement is different. It has been observed by the Supreme Court in CIT vs. Bagyalakishmi Co. (1965) 55 ITR 660 at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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