9911796707
TMI Blog1993 (3) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... rcumstances of the case, the Tribunal is justified in interfering with the finding of the Income-tax Officer (confirmed by the Appellate Assistant Commissioner) that both Smt. Kadishabi and Smt. Ayishabi were benamidars of Shri Abdullakoya? " The assessee-firm is constituted by four partners, viz., (i) Sri A. V. Mammed Haji, (ii) Sri M. A. Aboobacker, (iii) Smt. P. M. Kadishabi and (iv) Smt. P. M. Ayishabi. The first two partners had contributed Rs. 25,000 and Rs. 5,000, respectively. The other two partners had not contributed any amount towards capital. The building wherein the business was conducted by the firm is owned by Smt. Kadishabi. By the partnership deed, all the four partners were entitled to equal shares in the profit and loss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a genuine one. The Tribunal has, therefore, committed a grave error in interfering with the concurrent finding reached by the Income-tax Officer and the Appellate Assistant Commissioner. The partnership was constituted by four partners of whom only two had contributed towards capital. The third partner, Smt. P. M. Kadishabi, did not make any contribution but the building where the partnership firm conducted business belongs to her. Though the assessment order mentions about the capital contributed by the first two partners, viz., Mammed Haji and Aboobacker, as Rs. 25,000 and Rs. 5,000, respectively, the partnership deed, annexure-D, does not make mention of these amounts whereas clause (5) of the document states that the capital of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these three statements, the only conclusion possible is that the two ladies, viz., Smt. Kadishabi and Smt. Ayishabi, have nothing to do with the partnership business and that they were only name-lenders for Abdulla Koya, husband of Smt. Kadishabi. From the statements of Smt. Kadishabi and Smt. Ayishabi, it is clear that a partnership as contemplated under section 4 of the Indian Partnership Act has not been constituted. The definition of partnership in section 4 of the Indian Partnership Act contains three elements, viz., (i) there must be an agreement entered into by all the partners concerned, (ii) the agreement must be to share the profits of the business and (iii) the business must be carried on by all or any of the partners concerne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccording to clause (b) of that Explanation, a firm shall not be regarded as a genuine one 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 benamidar of any person, not being 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. From the sworn statements of the three partners, the Assessing Officer inferred that partners 3 and 4 were only benamidars of Sri Abdulla Koya, who was not a partner of the firm. From the statement of Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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