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TMI Blog2017 (11) TMI 1605X X X X Extracts X X X X X X X X Extracts X X X X ..... ote that the order of the Tribunal dated March 7, 1993 specifically refers to the statement made by Shri Satish Dongare and Shri Anand Meshram members of the AOP who have specifically denied any knowledge of their share in the applicant-assessee, i.e., AOP. In terms of section 167 of the Act as in force during the subject assessment year where individual shares of the members of an AOP in the whole or in part is indeterminate/unknown then tax would be charged on such AOP at the maximum marginal rate. In the present case, as is evident from the order of the Tribunal dated March 7, 1993, it is clear that one of its members namely Mr. Satish Dongare disputes he is a partner and states his father is one and even does not indicate his share. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subject assessment years showing its status as unregistered firm (URF). Thereafter, the Assessing Officer issued reopening notices under section 148 of the Act seeking to reopen the subject assessment years. On receipt of the reopening notices, the applicant-assessee filed its return of income showing its status as an association of persons (A.O.P.) as insisted by the Revenue. The Assessing Officer by order passed for subject assessment years assessed the applicant-assessee in the status of A.O.P. with indeterminate shares. Thus, taxed the applicant-assessee at the maximum marginal rate for the subject assessment years. (b) Being aggrieved, the applicant-assessee filed appeals to the Deputy Commissioner of Income-tax (Appeals) (DCIT(A)). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Revenue while dismissing the appeals of the applicant-assessee 4. It is on the basis of the above facts that we shall now opine on the two questions of law proposed for our consideration. 5. Regarding question A : (a) We note that all the authorities under the Act have concurrently come to a finding of fact on the basis of the evidence before it that the applicant-assessee is in the status of an AOP. In fact, the basis/foundation of the proceedings is that in the return of income filed, the applicant-asses see itself declared its status as an AOP. This is so declared in the return of income filed in response to notice under section 148 of the Act. (b) Mr. Dewani learned counsel appearing for the applicant-assessee submits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firm or even the name of the firm. In the above view, the Tribunal was justified in holding that the correct status of the appellant-assessee is that of an AOP. (d) It is a settled position in law that a partnership arises out of an agreement/contract between persons to share the profits of the business carried on by all or any of them acting for all. Thus, the sine qua non for the creation of a partnership is an agreement between persons to form a partnership. This agreement between the parties may be oral and not necessarily in writing. However, the agreement between the so-called par ties to form a partnership has to be established. In the present facts, as the order dated March 7, 1999 of the Tribunal records that the so-called memb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the authorities under the Act, i.e., Assessing Officer, Deputy Commissioner of Income-tax (Appeals) as well as the Tribunal holding that the applicant-assessee is an AOP and not unregistered firm is justified. (g) In the above view Question No. A is answered in the affirmative, i.e., in favour of the respondent-Revenue and against the applicant-assessee. 6. Regarding Question No. B : (a) We note that all the three authorities under the Act, while holding that the applicant-assessee is an A.O.P. differed on the issue of the members having determinate shares. The Assessing Officer and the Tribunal have taken the view that the AOP has an indeterminate share, while, the Deputy Commissioner of Income-tax (Appeals) has taken a view tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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