9911796707
TMI Blog1987 (5) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee-firm was genuine and was entitled to registration for the assessment year 1969-70 ? " The relevant assessment year is 1969-70. The question referred to us is concluded by the decision of a Full Bench of this court in the case of CIT v. S. K. Sahana Sons Limited (T. C. Nos. 249 to 251 of 1976 disposed of on May 12, 1987-[1988] 169 ITR 617 (Pat)). In order to show that it is completely covered by that decision, some facts need be stated. The assessee is a partnership firm. It owned a colliery, namely, Central Alkusa Colliery Company. For the assessment year 1968-69, the assessee filed two returns, one for the period ending June 30, 1968, as unregistered firm and another for the period July 1, 1968, to October 21, 1968, as regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om business. It, therefore, held that the assessee was entitled to be assessed as a registered firm. Being aggrieved by the order of the Tribunal, the Revenue claimed reference under section 256(1) of the Act. The core question in this case is whether the income of the assessee in the shape of minimum guarantee and royalty received by the assessee from the managing contractor was income from business or not. That was the central point for the simple reason that unless there is a business, there cannot be a partnership. It is well known that a partnership is an association of persons to carry on business and, therefore, if that body or association does not carry on business, it cannot claim registration. The agreement between the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee from business. Since the income was not from business, the firm was not entitled to be registered. Therefore, we are of the view that the Appellate Tribunal was not justified in holding that the assessee, M/s. Central Alkusa Colliery Company, was carrying on business through the managing contractor nor could it be held that the income of the assessee was income from business. The Tribunal was not right in holding that the assessee was entitled to registration for the year 1968. The question referred to us is thus answered in the negative, in favour of the Revenue and against the assessee. However, in the circumstances of the case, there will be no order as to costs. Let a copy of this judgment be transmitted to the Assistant R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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