9911796707
TMI Blog1974 (6) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... . In our view, the renewal of registration in this case should be granted. - - - - - Dated:- 17-6-1974 - Judge(s) : G. RAMANUJAM., V. RAMASWAMY. JUDGMENT The judgment of the court was delivered by RAMANUJAM J.-The assessee is a firm of two partners, A. Shanthi Nainar and A. Padmaraj, dealing in silk cloth. The partnership was constituted under a deed of partnership dated May 30, 1958. According to the said deed, the profits or losses are to be shared in the ratio of 13 : 5 between Shanthi Nainar and Padmaraj. The firm was registered under section 26A of the Indian Income-tax Act, 1922, for the year 1959-60, and, later, registration was renewed up to the assessment year 1961-62. On April 13, 1960, there was a partial partition in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rship deed dated May 30, 1958, did not specify the individual shares of the partners with effect from May 2, 1960; and (3) that the firm constituted under the partnership deed dated May 2, 1960, was the real partner of the firm and that there could not be a valid partnership between an individual and a firm. The assessee-firm preferred an appeal to the Appellate Assistant Commissioner but without success. The Appellate Assistant Commissioner upheld the order refusing renewal of registration holding, (1) that the partnership deed dated May 30, 1958, did not incorporate the change in the constitution of the firm; (2) that the same did not specify the individual shares of the partners ; and (3) that the share of profits has been all along tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law ? " Mr. K. Srinivasan, learned counsel for the assessee, points out that all the authorities below, including the Tribunal, are in error in going behind the terms of the partnership deed and dealing with the question of registration of the assessee-firm in the light of other facts and circumstances. According to the learned counsel, the partnership deed dated May 30, 1958, contemplated only two partners, Shanthi Nainar and Padmaraj, who were to share the profits and loss in the ratio of 13: 5, respectively. The partnership deed, as such, does not anywhere indicate that Shanthi Nainar represents the joint family of himself and his three sons. It may be that Shanthi Nainar in fact represented the Hindu undivided family of himself and h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the joint family to the knowledge of the other partner, it must be held that the assessee-firm consisted of two partners, one of whom is the Hindu undivided family of Shanthi Nainar and his three sons. We are not able to understand the reasoning of the Tribunal in this regard. The fact that the other partner, Padmaraj, had knowledge that the other partner, Shanthi Nainar, represented his Hindu undivided family will make no change in the legal position. Whether he had knowledge of the true position or not, the fact remains that the partnership deed dated May 30, 1958, on the face of it, does not show that the Hindu undivided family had any interest in the partnership. As pointed out by the Supreme Court in the same case, Shanthi Nainar might ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hindu undivided family joined a firm as a partner. He contributed his share from out of the family funds. There also, the question arose as to whether the firm could be registered under section 26A of the Indian Income-tax Act, 1922. Registration was refused on the ground that the real partners of the firm were the Hindu undivided families of the partners and that as the adult coparceners in the joint families exceeded 20 that could not be a valid partnership, as it contravened section 4 of the Indian Partnership Act. Their Lordships of the Supreme Court expressed the view that for the purpose of finding out as to who are the partners of the firm, one has only to look to the partnership deed and not to go behind it, that if the partnership ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
