9911796707
TMI Blog1991 (8) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... erence relates to the assessment year 1983-84. The assessee-firm was constituted with two partners, namely, Shri Basantlal Jain and Mrs. Chhagani Devi Jain. Shri Jivraj Jain, a minor was admitted to the benefits of partnership. The firm was granted registration up to the assessment year 1982-83. The firm was carrying on business under the name and style, M/s. Basantlal Jain and Co. The minor, Sri Jivraj Jain, attained majority and was admitted as a full-fledged partner to the newly constituted firm with effect from April 1, 1982. This was done by another deed of partnership dated January 29, 1983. The said deed is available at annexure "D" to the paper book and it was recorded in the deed that the said Jivraj Jain having attained majority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crues not from day to day but at the end of the accounting year and, therefore, as on the date of execution of the deed of partnership, Sri Jivraj Jain was legally competent to share losses ; the order of the Income-tax Officer cannot be sustained. However, the Tribunal heard the matter ex parte as none appeared for the assessee. The Tribunal was of the view that, during the first fortnight of the accounting year, i.e., April 1, 1982, to April 12, 1982, Sri Jivraj Jain was a minor and yet, by the deed of partnership, he was made a full-fledged member, though, under the law, he could not be burdened with sharing of loss during his period of minority and, accordingly, allowed the appeal filed by the Revenue. We have heard Dr. M. K. Sarma, l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tration granted to a firm for any assessment year, shall have effect for every subsequent assessment year provided, inter alia, there is no change in the constitution of the firm or the shares of the partners as evidenced by the instrument of partnership on the basis of which the registration was granted and the firm furnishes, within the time allowed, the return of income for such subsequent assessment year along with the declaration in the prescribed form. Sub-section (8) of said section 184 of the Act, lays down that, where any such change has taken place in the previous year, the firm shall apply for fresh registration for the assessment year concerned in accordance with the provisions of the said section. Section 30 of the Partnershi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time he was admitted to the benefits of partnership. So, from the language of section 30 of the Partnership Act, in our opinion, it is clear that, after attaining majority, a person can admit even the liability that might have accrued to him in the partnership while he was a minor if he elects to become a partner. In Jagadhri Electric Supply and Industrial Co. v. CIT [1987] 166 ITR 143, the Punjab and Haryana High Court has held that there is no bar for a minor on attaining majority during the currency of the year to take responsibility for the losses of a partnership firm which may have been suffered prior to the date of his attaining majority. We are in respectful agreement with the ratio laid down. So in the present reference, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... until the date of such acceptance. He is competent to enter into an agreement to share losses, assuming that, during the period of his minority, some losses had accrued to the firm. Reliance has also been placed by Dr. Sarma on CIT v. Jain Steel Rolling Mills [1989] 177 ITR 498 (P H), wherein it was held that partnership deed can be given retrospective operation as between the parties to serve the limited purpose of dating the accounts of profits and losses. In that case, the minor attained majority during the accounting year and it was further held that the minor could contract to share the profits and losses, even for a small period of 13 days during which he was a minor and the firm was entitled to registration. We have noted the r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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