9911796707
TMI Blog1983 (9) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... tary concern of Shri G. L. Didwania, under the terms of a letter dated June l, 1957. On October I, 1958, a deed of partnership was entered into between Shri Shiv Shankar Aggarwal and Shri Bhagirath Bhushan on the terms and conditions mentioned therein. The partnership business was to be that of mining and transport or such other type as may be mutually agreed upon and was to be carried on under the name and style of Young India Mining and Transport Company. These two partners admitted four minor children of Shri G. L. Didwania to the benefits of partnership with effect from October 1, 1958. The share of profits and losses of the partnership was specified. Shri Shiv Shankar Aggarwal and Shri Bhagirath Bhushan were to get 4% each and the four minor children admitted to the benefits of partnership were to get 23% each. The losses, however, were to be borne by Shri Shiv Shankar Aggarwal and Shri Bhagirath Bhushan equally, i e., 50% each. The firm entered into an agreement with M/s. C. Didwania, the mine owners, on March 28, 1959, whereby it agreed to raise the ore, in the mines from April 1, 1959. The earlier contract in favour of M/s. G. Didwania was cancelled with effect from April I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated October 1, 1958, was a bogus partnership and not genuine. We would do well in reproducing the material which was considered by the Tribunal out of the material available on the record though the ITO and the AAC had dealt with additional material in more detail. In paragraph 10 of the order of the Tribunal, the Tribunal notices this material : "... From this statement, it is seen that in 1953 he started service with Didwania Bros. Pvt. Ltd., on a salary of Rs. 80 as a clerk to write up the accounts. Didwania Bros. Pvt. Ltd. is admittedly a concern in which shares are held by G. L. Didwania and his wife. This company was assembling service station equipment since 1954 and had its factory at Okhla Industrial Estate which is at a distance of about ten miles from Kashmere Gate, Delhi. His work was to see that the factory was working properly, that orders were executed in time and also to attend to the supervision of factory. He also became an employee of G. L. Didwania in M/s. G. Didwania and got a sum of Rs. 570 per month as salary for looking after the mining work. But examined a little more closely, he was unable to say what exactly was the mining work he attended to excep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 30, 1963, had been finalised. The deponent, however, did not remember his share, but thought there was some profit to his share. Shown the cash book of the firm, he admitted that there was no evidence in the cash book and ledger which would indicate that he had ever seen or supervised these books. The deponent had a bank account, but it was more or less a dead account. The deponent was earning a salary of Rs. 500 from M/s. G. L. Didwania and a similar salary from M/s. Didwania Bros. Pvt. Ltd. for the work done as their employee. He, however, stated that he was a partner in the appellant-firm and that he entered into the partnership on such terms since the contract of raising and transporting the iron ore was given to the firm by M/s. C. Didwania only on the condition that the minors were admitted to the benefits of partnership and were to be given 23% share of the profits. He agreed to bear 50% of the losses because in this business there was almost no chance of any loss. " After referring to this statement and the facts and circumstances of the case and particularly the, deposition of Shri Aggarwal, the Tribunal records these findings: "........ If the firm had been genuinel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Aggarwal and Shri Bhagirath Bhushan, were carrying on the business of the partnership. One of the essential conditions of a partnership is that the business must be carried by all the partners or by any one of them acting for all. The Tribunal came to the conclusion that the abovesaid two persons could not be said to carry on in law the business of the partnership. We are not required in these proceedings to examine the order of the Tribunal sentence by sentence to discover a minor lapse or slight infirmity in the opinion. The Tribunal considered the probabilities arising from facts established on record to come to its conclusion that a sham partnership has been put forward as having conducted a business and as consisting of partners who are clearly not the partners of the business except in form. This finding of the Tribunal is clearly supported by the material on record. Whether that material is sufficient or insufficient is not open to be considered in these proceedings under s. 256 of the Act. If there was some material before the Tribunal on the basis of which the Tribunal could come to that finding, or in other words, if a reasonable person acting reasonably could come to f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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