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TMI Blog1983 (11) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... as delivered by JAGANNATHA SHETTY J.-The following question has been referred by the Income-tax Appellate Tribunal, Bangalore Bench, under s. 256(1) of the I.T. Act, 1961, at the instance of the assessee Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in upholding refusal of registration to the assessee for the assessment years 1974-75 and 1975-76 ? " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ities upon the dissolution of the firm. The request for registration of the firm was rejected by the ITO for the years 1974-75 and 1975-76 on the ground that Sri T. Raghavendra Rao was not a partner, and that order was upheld by the AAC and also by the Tribunal. In these references, the only question to be considered is whether Sri Raghavendra Rao could be considered as a partner of the firm. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artner. Clause (6) of the deed states that the 8th partner was taken as working partner and he shall look after the day to day business of the firm. It is further stated that he should conduct the business of the firm as per the instruction and direction of other partners. It also provides that he should be paid a monthly salary of Rs. 400 which has to be treated as expenses of the firm for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ho have agreed to share the profits of business carried on by all or any of them acting for all. Persons who have so agreed with one another are called individually " partners " and collectively a " firm ". It is generally accepted that the sharing of profits is an evidence of partnership, but that by itself is not conclusive. In addition to that, there must be a direct and principal interest in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s case does not specify the share of the 8th partner except the payment liable to be made to him by way of salary at the rate of Rs. 400 per month. By reading the original instrument along with the deed of rectification, it seems to us that there is no relationship of partners as between Sri T. Raghavendra Rao and the other seven partners. In the view that we have taken, it is unnecessary to r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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