9911796707
TMI Blog1983 (9) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... er questions, but according to the Tribunal, the), were covered by question No. 1 which is the sole question referred to us. We are concerned in this reference with the firm of Messrs. Confeitaria de Janeiro. This firm was stated to be constituted by a deed of partnership executed on December 30, 1969. However, the stamp paper was purchased on January 9, 1970. The firm was claimed to have come into existence on April 1, 1969. The firm took over the business of bakery previously run by a body of individuals constituted by Andre Mascarenhas and his wife, Smt. Maria Luise D'Souza Mascarenhas. Under the provisions of the Portuguese Civil Code, the body of individuals or the communion, is it was as called under the provisions of the Code, bad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no power of management. Accordingly, in the opinion of the ITO, she could not legally enter into any contract in respect of communion property unless duly authorised by court. Since, in the instant case, such authorisation has not been granted by a competent civil court, the deed executed by her was in his opinion not valid. Aggrieved by this order, the assessee carried the matter in appeal to the AAC. The, AAC upheld the stand taken by the ITO. In his view, the wife could not be a partner and carry on business Without the husband's explicit authorisation. As there was no authorisation in the present case, he concurred with the conclusion of the ITO that the partnership was invalid and, hence, not entitled to registration. He also agreed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en the properties owned by the wife, rests only in the husband. Under section II 93, the wife cannot, without the husband's authorisation, purchase or alienate the assets nor acquire obligations except in cases where the law particularly permits it. Section 1196 stipulates that the authorisation by the husband to the, wife to enable the latter to do business amongst others can be given only by a written document, authentic or authenticated. On these provisions, the departmental authorities want to criticise the formation of the partnership as enabling the, wife to manage the business as an incident of the partnership. The short answer is that the very partnership deed which gives to the wife the authority as a partner to do business must it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it would cut at the very root of the notion of the joint undivided family to hold that with reference to a coparcenary business, members can at the same time be both coparceners and partners. In the case of a communion, there is no question of any undivided family as each of the spouses has definite, claimable share and is only a statutorily recognised unit made up of such distinct shares. In fact, in Lachhman Das v. CIT [1948] 16 ITR 35 (PC), it has been held by the judicial Committee that the karta of a joint family can well enter into a partnership with an individual member of the coparcenary as a separate party. It has also been held by the Privy Council in Sundar Singh Majithia v. CIT [1942] 10 ITR 457, that there is nothing in the Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion from giving up or forgoing their interest in any communion property in favour of any other party has been brought to our notice. In the, instant case, the two constituent members of the communion, viz., the husband and wife, have in respect of the bakery business, which was communion property, transferred the same to a new assessable entity, viz., the partnership. The fact that to this entity their four minor children were admitted to the benefits thereof does not alter the situation. Nothing has been brought to our notice which precludes alienation or transfer of communion property and it is not possible to agree with the view that so long as the communion subsists, the communion property may not be alienated or transferred. Once the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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