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TMI Blog1937 (7) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... ners, namely, the brothers Haji Ghulam Rasul and Haji Khuda Bakhsh, till the 1st July, 1932. Haji Ghulam Rasul had a 12/16th and Haji Khuda Bakhsh 4/16th share in the firm. On the 1st July, 1932, the constitution of the firm was changed and the three sons of Haji Ghulam Rasul, namely, Abdul Wahid, Abdul Rahman and Abdul Ghaffar, became partners in the firm to the extent of 3-16th, 3-16th and 2-16th respectively. The share of Haji Ghulam Rasul was reduced from 12-16 to 4-16th. On the 21st March, 1934, a partnership deed was executed evidencing the fact that the firm consisted of five partners, and that their shares were as specified above. On the strength of this deed of partnership an application was presented to the Income Tax authoriti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the certificate produced by the assessee as regards the shares of the different partners must be regarded as conclusive of the matter by the Income Tax authorities, and that the manner in which they could prevent evasion of taxation was to resort to the provisions of Sec. 48 of the Income Tax Act and disallow refunds in the case of persons who were not proved to be genuine partners of the firm in question. In my opinion the contention put forward on behalf of the assessee is devoid of all force. The instrument of partnership specifying the individual shares of partners referred to in Sec. 26-A of the Income Tax Act means obviously a geniune instrument of partnership. If there is evidence, direct or substantial, showing the bogus nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partnership between the lady and her three minor children. This document purported to show the shares of the different partners in the profits of the firm without stating the business of the firm, or its assets, or wherefrom the profits were derivable and there was no combination of property, labour or skill other than the income proposed to be shared with her children which the lady received from certain investments in shares of a large sum of money left by her father. Registration was refused by the Income Tax authorities on the ground that the whole transaction was illusory and bogus and that the deed of partnership was executed for the purpose of evading income tax only. It was held by the High Court that the circumstances showed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee and assessed him as an individual on the profits of the business. It was held that the assessee having failed to discharge the onus of establishing that the business managed and controlled by him was a partnership, he was rightly assessed as an individual on the profits of the business. The onus would thus rest on the person, who applies for the registration of the firm, to prove that a genuine instrument of partnership has been executed and that all the persons named therein are actual persons and not dummies . In the present case it was alleged by the assessee that the three sons of Ghulam Rasul had become partners on the 1st July 1932. No deed of partnership was, however, executed till the 21st March 1934. No application for t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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