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TMI Blog1979 (7) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... with the partnership deed. The partnership deed indicated the names of the partners as Smt. Satya Banaik, Smt. Vinod Banaik and Sardar Gurnam Singh. The recital in the partnership deed about the second named partner, namely, Smt. Vinod Banaik was as under : " Smt. Vinod Banaik, wife of Shri Satish Kumar Banaik, by occupation painter and housewife representing the HUF constituted of herself and her husband, Shri Satish Kumar Banaik. " The ITO refused the claim for registration on two grounds : (1) Smt. Vinod Banaik could not become the partner of a firm as representative of the HUF; and (2) the two lady partners were already running another firm as partners and that, therefore, by entering into a partnership here, it was a firm which wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p deed relating to the capacity in which Smt. Vinod Banaik had joined the partnership. According to him, she had joined it as representing the HUF. This she could not do. In support of his argument, he has relied on a decision of the Madras High Court in the case of V. M. N. Radha Ammal v. CIT [1950] 18 ITR 225, which decision was approved by the Supreme Court in the case of CIT v. Seth Govindram Sugar Mills [1965] 57 ITR 510. I think the proposition, as put forth by learned counsel for the department, is not at all the proposition arising in the case. Smt. Vinod Banaik had entered into the partnership not in the capacity of a karta of an HUF but as a representative of the HUF. There is a clear difference between the two, namely, " acting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed thus : " The Indian Contract Act imposes no disability upon members of a Hindu undivided family in the matter of entering into a contract inter se or with a stranger. A member of a Hindu undivided family has the same liberty of contract as any other individual : it is restricted only in the manner and to the extent provided by the Indian Contract Act. Partnership is, under section 4 of the Partnership Act, the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all: if such a relation exists, it will not be invalid merely because two or more of the persons who have so agreed are members of a Hindu undivided family. It is now settled law that in considering an applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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