1984 (3) TMI 42

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..... towards what was described as the expenditure incurred by the vendor for cultivation of the estate for the period from April 1, 1971, to August 31, 1971. For the assessment year 1972-73, the assessee filed an application in Form No. 7 for registration of the firm enclosing a copy of the partnership deed. That application was not signed by all the partners personally. Two of the partners, namely, Mohamed Imam Nissar and Mohamed Maqbool Hussain, did not sign, but their authorised agents have signed the application on their behalf. The assessing officer, however, accepted the application and by an order dated October 28, 197.5, granted registration to the firm under s. 29 of the Act for the year ending March 31, 1972. Before the assessi .....

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..... rasad could not urge, against the finding recorded by the Commissioner that the grant of registration to the assessee-firm was illegal. He, however, urged that in this case the invalidity of registration per se cannot be said to be prejudicial to the interests of the Revenue since the firm had no taxable income but only a loss to be carried forward. We do not think it is necessary to examine this contention. It is no doubt true that an order which is not prejudicial to the interests of the Revenue cannot be revised by the Commissioner under s. 35 of the Act. There may be cases where grant of registration may result in securing more tax to the State if individual partners have got other independent income. The instances of that nature are .....

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..... , cannot be found fault with on the ground that it was not prejudicial to the interests of the Revenue. As to the next contention about the revenue expenditure of Rs. 50,000 allowed by the assessing officer, the Commissioner has stated that prior to the sale of the estate, there was no connection whatsoever between the vendor and the purchaser and that the payment had the effect of enhancing only the capital value of the estate. This reasoning may not be wholly justified. The estate was purchased by the assessee on October 29, 1971. The assessee was entitled to the crop of that year and the vendor had incurred some expenditure if not Rs. 50,000 for raising the crop before the sale of the estate. While computing the income from the crop f .....

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