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TMI Blog1949 (9) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 66(1) of the Indian Income-tax Act. These applications relate to the assessments for the years 1939-40, 1940-41, 1941-42 and 1942-43. The questions of law raised are the same in all these applications. 2. The assessee is a registered firm consisting of Jesingbhai and his two sons, Mangaldas and Manilal. On the death of Mangaldas on 6th December, 1941, his son Shantilal was taken as a partner in the assessee firm. The firm came into existence in 1924. It does business at Ahmedabad. Its business is in sarafi, insurance, brokerage, cotton, etc. The material partnership deed is dated 26th January, 1934. According to it, there are three partners, each one having a five annas share in the profits of the firm. One anna share has been rese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of firm, partner and partnership in the Indian Income-tax Act and on the case of Vissonji Sons Co. v Commissioner of Income-tax, Central[*] , held that the partners of a firm doing a business could not constitute a firm by having different shares in the profits of another business. The attention of the Tribunal was drawn to relevant evidence but it did not examine it. It held, as pointed out just now, that the same partners could not constitute firms by different shares in different businesses. The Tribunal treated the question as a pure question of law and allowed the appeals filed by the department against the orders of the Appellate Assistant Commissioner who held:- On the whole taking everything into conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 1 anna is reserved for charity, but as that share is completely under the control of Jesingbhai it has been found by the department, and that finding is accepted by the Tribunal, that that share really belongs to Jesingbhai. Therefore, the shares are 6 annas to Jesingbhai and 5 annas each to the other two partners. These three partners also carried on another business at Bhavnagar and this business was commenced in 1918 and the shares of the three partners are equal. The question that arose for the determination of the Tribunal was whether these two partnerships constitute two different firms or whether the three partners carry on the same firm and the same business at Ahmedabad and Bhavnagar. The Tribunal came to the conclusion that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce was whether a certain item which the assessee claimed as a bad debt was a bad debt or not, and the learned Chief Justice disposed of that reference by coming to the conclusion that this question was really a question of fact and the only question of law that arose was whether there was sufficient evidence to justify the finding of fact by the Tribunal. Therefore, this particular observation on which the Tribunal has relied was not called for the determination of the reference and therefore it must be looked upon as a pure obiter. As against this obiter there are two decisions to which Sir Jamshedji has drawn our attention which are directly in point and which have taken the view contrary to the decision of the learned Chief Justice. One ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of Krishna Ginning Pressing Factory v. Commissioner of Income- tax, Punjab(2). In that case, under the same partnership deed two separate businesses were to be carried on, and the question that arose for determination was whether two separate firms came into existence under the same partnership deed or only one firm, and on the construction of the partnership deed the High Court at Lahore came to the conclusion that there was only one firm and not two firms. The very fact that the Lahore High Court considered this question clearly shows that according to that High Court in law there could be two separate firms although the partners of the two firms may be common. Therefore, we disagree with the Tribunal in the view it has taken of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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