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TMI Blog1996 (4) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... ectric Co. and Shree Annapurna Udyog were separate firms and in excluding the income of Shree Annapurna Udyog which had been included in the income of Shree Annapurna Electric Co. ? " Shree Annapurna Electric Company, Giridih ("the electric company", for short), is a partnership firm consisting of two partners, namely, Shri Uma Shankar Chhaperia and Shri Hari Shankar Chhaperia, having equal shares in the firm. In the course of assessment of this firm, the Assessing Officer discovered that the same persons were running another partnership firm under the name and style of Annapurna Udyog ("the Udyog", for short) which was carrying on trade and business in mica. The partners in the two partnership-firms being the same two persons, who, as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istence on November 26, 1969 ; (ii) The assessee-firm carried on business in electrical goods while the other firm carried on its trade and business in mica ; (iii) The two firms were situated at different places ; the assessee-firm functioned from its office at Giridih, whereas the other firm had its office at Pachambha, several kilometres away from Giridih ; (iv) The two firms maintained separate books of account and had separate and different sales tax registration numbers ; (v) Further, the two firms employed different persons and in fact different numbers of persons as employees ; (vi) The assessee-firm had only one staff whereas the Udyog had 7 to 8 employees and the two firms maintained separate wage registers for their re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in case the two partnership firms are constituted by the same partners who share the profits and losses in the firms in equal proportion then in all cases and regardless of other facts and circumstances, it must be held that the two firms are one and the same and their incomes must be clubbed together. In the case before the Supreme Court there were two partnership firms having the same partners. One partnership firm ran a saw mill whereas the other firm carried on business in timber. There were evidences to show that the saw dust was sold by the saw mill to the other firm which was dealing in timber and to this extent there was also some indication regarding the interlacing or interlocking of the two businesses. Yet, the Supreme Court did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... creates and defines the relation of partnership and, therefore, identifies the firm. If that conclusion be right, it is only a further step to hold that each partnership agreement may constitute a distinct and separate partnership and, therefore, distinct and separate firms. That is not to say that a firm is a corporate entity or enjoys a juristic personality in that sense. The firm name is only a collective name for the individual partners. But each partnership is a distinct relationship. The partners may be different and yet the nature of the business may be the same, the businesses may be different and yet the partners may be the same. An agreement between, the partners to carry on a business and share its profits may be followed by a se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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