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TMI Blog1991 (11) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... ation to the firm for the assessment year 1980-81?" The background facts are that the assessee filed an application for registration claiming that it is entitled to registration in terms of section 185 of the Act. The application was considered by the Income-tax Officer, Keonjhar Circle (hereinafter referred to as "the Assessing Officer"). The assessee's claim was that it was a firm consisting of two partners, viz, Shri Ramesh Chotolal Thacker and Sri Trilochan Singh, each having 50% share in the profit and loss of the firm. The Assessing Officer found that the business carried on by the assessee was sale of foreign liquor. He noticed that the name of Trilochan Singh was not endorsed in the licence issued for carrying on the business. He h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c prohibition in either the Rules or the Board's Rules for a licensee to take a partner, yet the very fact that the licence did not contain the name of Trilochan Singh clearly established that he was in no way connected with the functioning of the business. Reliance is placed on the preamble to the deed of partnership dated July 2, 1978, wherein it has been stated that Ramesh Chotolal Thacker, having obtained a licence to sell foreign liquor at Barbil, found himself unable to manage the affairs individually for want of capital and working hand and, therefore, approached Trilochan Singh to do business with him as a partner. It is stressed that, in the absence of the name of Trilochan Singh in the licence, so far as the management of business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to by the High Court. Rule 6 of the Punjab Liquor Licence Rules provided that, when a licence is granted to a partnership or firm not incorporated under any Act, all the individuals comprising the partnership or firm should be specified on the licence. Rule 7 enabled the original partners to take a new partner provided the proposed partner was eligible under the Punjab Intoxicants Licence and Sale Order or the Punjab Liquor. Licence Rules. Rule 4 thereof provides that a licence may be granted to an individual, a partnership or a firm amongst others. The rules specifically provided that if the licensee is firm, no new partner could be taken without the approval of the concerned authorities. The rules also prohibited anybody to sell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Warasat Hussain v. CIT[1971] 82 ITR 718 and CIT v. Narpati Khan and Co. [1974] 97 ITR 645 that where the licence for trading in liquor stood in the names of only some of the partners of a firm and was not transferred to the firm, there was no illegality in the partnership. But where the licence itself is transferred to the partnership, it may result in an assignment of part of the licence, and section 23 may come into force. In the instant case, it is accepted that the licence continued to stand in the name of Ramesh Chotolal Thacker. The point raised by Mr. Kar relating to contravention of the terms of the partnership does not appear to have been raised before the authorities below, and has not been considered by the Tribunal. The Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X
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