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TMI Blog1985 (4) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... s 1972-73, 1973-74 and 1974-75 ? " The partners of the assessee-firm are also partners of another firm by name, M/s. C. A. Ouseph V. J. Paul, carrying on business in grocery and general merchandise at Trichur. The assessee-firm is carrying on business in jewellery at Trichur. Differing from the views expressed by the Commissioner in respect of the assessments for the years 1972-73 and 1973-74 in proceedings under s. 263 of the Act and by the AAC with respect to the assessment for the year 1974-75, the Income-tax Appellate Tribunal, Cochin Bench, has allowed the appeals relating to the different periods aforesaid, directing deletion of the income of the firm, M/s. C. A. Ouseph V. J. Paul, from the total income of the assessee-firm. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rge of income-tax under s. 4 of the Act is on every person whose total income of the previous year or years is liable to income-tax under the Act. The expression " person " as defined in s. 2, clause (31), of the Act includes also a firm. Chapter XVI of the Act relates to the assessment of firms and s. 185 prescribes the procedure for registration of firms by the ITO. There is no dispute that the assessee-firm as well as the firm under the name and style "C. A. Ouseph V. J. Paul" are both separately registered under s. 185 of the Act. The Appellate Tribunal has found that both the firms are doing independent business and there is no interlacing or interlocking of the business of both the firms. Counsel for the Revenue relies on the ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion expressed by Beaumont C.J. and held that " there is nothing in law to preclude common partners constituting two separate firms for the purpose of the Incometax Act". Since, however, the question whether there were actually two firms or only one had not been considered, the Tribunal was directed to determine the question of fact for the purpose of assessment under the I.T. Act. The question of law was answered in favour of the assessee that it is open for common partners to constitute separate firms in respect of different businesses carried on by them for the purpose of the I.T. Act. This decision was followed by a Division Bench of the Punjab and Haryana High Court in Punjab Co-operative Bank Ltd. v. CIT [1968] 70 ITR 849 (sic). Coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u Sons [1980] 121 ITR 97, has dissented from the view expressed by Beaumont C.J. in Vissonji Sons and Co.'s case [1946] 14 ITR 272 and has followed the decision in Jesingbhai Ujamshi v. CIT [1950] 18 ITR 23 (Bom) and other decisions following the same view. The decision of the Division Bench in Addl. CIT v. Venkata Narasimha Rao Co. [1976] 104 ITR 28 was overruled. Propositions Nos. 4 and 6 laid down by the Full Bench at page 108 are extracted below: " 4. Under the income-tax law a firm is an independent and distinct juristic person for the purpose of assessment as well as for recovery of tax as it is a 'person' within the meaning of s. 2(31) of the Act, having its own entity and personality. It is also a separate entity under the sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income-tax Act. Under section 3 of the Income-tax Act also, a 'firm' is treated as a unit of assessment and as distinct assessable entity. Though under the partnership law, a firm is not a legal entity but only consists of individual partners for the time being, for tax law, income-tax as well as sales tax, it is a legal entity." Whether the same set of partners constituting two different firms can be treated as one firm or as two separate assessable units or entities for the purpose of the General Sales Tax Act came up for decision before a Division Bench of this court in Dy. Commr. of Sales Tax v. Kelukutty [1978] 42 STC 108. Following the decision of the Supreme Court in State of Punjab v. Jullundur Vegetables Syndicate [1966] 17 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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