9911796707
TMI Blog2002 (2) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... of the partners has knowledge about the same, as provided under clause (b) of the Explanation. - Tribunal has erred in holding that the assessee firm is entitled for registration. Accordingly, we answer the reference in favour of the Revenue and against the assessee. - - - - - Dated:- 11-2-2002 - Judge(s) : V. S. SIRPURKAR., K. RAVIRAJA PANDIAN. JUDGMENT The judgment of the court was delivered by K. RAVIRAJA PANDIAN J.-The question of law, on which we are called upon to answer the reference, is as follows: "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in holding that the sub-partnership is a legally permissible device and by entering into sub-partnership, a partner will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1966] 62 ITR 323 (SC); CIT v. Chander Bhan Harbhajan Lal [1966] 60 ITR 188 (SC) and CIT v. Bagyalakshmi and Co. [1965] 55 ITR 660 (SC) has come to the conclusion that the assessee-firm would be entitled to registration although a partner may divide his share of profit with others and the relation between a partner in the firm and his sub-partner cannot be considered to be the same as the relation between a benamidar and the real owner. This order of the Tribunal is in challenge in the present case at the instance of the Revenue. Learned counsel appearing for the Department has contended that the order of the Tribunal is unsustainable in law for the simple reason that the decisions relied upon by the Tribunal for reaching the conclusion th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person, not being a partner of the firm, and any of the other partners knew or had reason to believe that the first-mentioned partner was such benamidar and such knowledge or belief had not been communicated by such other partner to the Assessing Officer in the prescribed manner." The Andhra Pradesh High Court in Jayalakshmi Oil Firm's case [1997] 228 ITR 443, held that the Explanation to section 185 of the Income-tax Act, 1961, added with effect from April 1, 1971, clarifies that for the purpose of section 185 and section 186 a firm shall not be regarded as a genuine firm if any partner of the firm was, in relation to the whole or any part of his share in the income or property of the firm, at any time during the previous year, a benamid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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