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TMI Blog1979 (3) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... s capital investment was accepted by the ITO. As regards Shri Omprakash Agrawal, he has been examined by the ITO. The ITO found that a sum of Rs. 4,000 was shown as initial capital in his name. Shri Omprakash Agrawal stated before the ITO that he received some money from time to time from his own mother but he failed to tell what amount was given by his Nani and what amount was given by his mother. The ITO found that both his mother and his Nani are dead and his mother died eight years back and Nani also died several years back. The ITO has also pointed out that Shri Omprakash Agrawal whether he kept the amounts received from his mother and Nani in the bank or not. In reply he informed that he did not deposit the money in bank or post offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the capital amount of Rs. 4,000 and that this amount was actually belonging to Shri Kishanlal Agrawal then it could only go to show that Shri Kishanlal Agrawal intended that Rs. 4,000 should be treated as capital of Shri Omprakash Agrawal. It cannot show that Shri Omprakash Agrawal was not a genuine partner of the assessee firm. There is no legal objection in the father and the son becoming partners in a firm. 7. Even if it is held that Shri Omprakash Agrawal contributed no capital but he was acting partner in the assessee firm, even then registration has to be allowed. 8. The learned counsel for the assessee has filed a copy of the partnership deed which shows that the deed was executed on 4th Sept., 1972 and that Shri Kishanlal Ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t out in the Rules must be made; (iii) the application should be made before the assessment of the firm under s. 23, for that particular year; (iv) the profits or losses if any of the business relating to the accounting year should have been divided or credited, as the case may be, in accordance with the terms of the instrument; and (v) the partnership must be genuine and must actually have existed in conformity with the terms and conditions of the instrument of partnership, in the accounting year. 9. It has been held in the case of K.D. Kamath And Co. vs. CIT, Mysore(2), that the legal requirements under s. 4 of the Partnership Act to constitute a partnership in law are: (i) there must be an agreement to share the profits or losses of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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