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TMI Blog1966 (10) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee-firm was entitled to registration under section 26A?" The material facts are these: The assessee is a firm. It consisted of four adults and one minor. The relevant year of assessment is 1956-57. The fourth partner was one Chandrika Prasad and it was his son, Jhabboo Lal, a minor, who was said to have been admitted to the benefits of partnership. The firm was constituted under a deed of partnership dated 22nd October, 1949. The preamble to the partnership deed reads: "Whereas the first, second, third, fourth and fifth parties formed a joint Hindu family and have divided their movable property by means of the award of an arbitrator dated 21st October, 1949. And whereas the first, second, third and fourth parties have expressed a d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be contrary to law. In this he was supported by a decision of the Punjab High Court in Banka Mal Lajja Ram Co. v. Commissioner of Income-tax. The assessee then went up in appeal to the Appellate Assistant Commissioner. It was contended that the intention of the partners was only to admit Jhabboo Lal to the benefits of partnership and even if some clause of the partnership deed appeared to suggest that Jhabboo Lal was being treated as a full-fledged partner for certain purposes, such clauses should be deemed to be non-operative and the firm was entitled to registration. In support of this contention the assessee relied upon the decision of the Madras High Court in Jakka Devayya Sons v. Commissioner of Income-tax, P. Vincent v. Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oss by the minor. In Commissioner of Income-tax v. Shah Jethaji Phulchand, a decision delivered on the same date by the Supreme Court as in Shah Mohandas's case, it was reiterated that the partnership deed should be construed reasonably. In this case, although the minor was described as a full partner, nevertheless, it was, on reading all the clauses of the deed, held that he was only admitted to the benefits of the partnership. In coming to this conclusion the Supreme Court was influenced mainly by the fact that in clause (9) of that agreement, the minor, though described as a partner, was not made to bear the losses of the firm. In clause (9) it was provided : "The portion of loss to be contributed by the third party (minor) is to be bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s deliberately entered. In these circumstances, the interpretation placed upon the partnership deed by the Tribunal cannot be said to be an unreasonable or impossible one. Dwarkadas Khetan's case has, therefore, been rightly relied upon by the Tribunal in rejecting the claim for renewal of registration by the assessee. The line of cases, particularly of the Madras High Court, in Jakka Devayya's case, and the Patna and the Bombay views in Dwarkadas Khetan's case, were specifically overruled by the Supreme Court, and it is no longer possible for the assessee to derive any comfort therefrom. It is also not possible to rewrite the contract for the parties and to hold, as submitted by the learned counsel for the assessee that at least the firm o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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