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TMI Blog1978 (1) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... he previous year relevant to the assessment year 1969-70, when Shri Radhey Lal attained majority and for that year his rights arid liabilities continued under the deed of partnership dated April 15, 1967, and the firm was entitled to the benefit of continuation of registration under s. 184(7) of the I.T. Act, 1961, on the basis of that partnership deed ? " The assessee was a partnership firm originally constituted under a deed of partnership dated 15th April, 1967. It consisted of three partners. Sheo Kumar Shah and Radhey Lal Shah, who were minors at the time of the execution of the deed of partnership, were admitted to the benefits of partnership. The benefit of registration was continued thereafter under s. 184(7) up to the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the application to the High Court. Having found that the question mentioned above was one of law and covered the entire controversy between the parties, the Tribunal referred the same to this court by its order dated 30th November, 1973. Hence this reference. The question is whether there is a change in the constitution of the firm when a minor admitted to the partnership attains majority. Before dealing with this question, we may refer briefly to the relevant provisions of the I.T. Act as well as that of the Partnership Act. S. 4 of the Partnership Act gives the definition of partnership, a partner, firm and firm's name. S. 5 provides that the relation of partnership arises from contract and not from status. S. 11 of the Contract Act sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtner or not. During this period of six months he continues to enjoy the same status in the firm which he had earlier before attaining the majority. Although sub-s. (5) has not clearly said so, yet it appears that by the legal fiction incorporated in this provision, a minor continues to be a minor and does not become a partner. The court has to assume all those facts and consequences which are incidental or inevitable corollaries to the giving effect of this fiction. In the instant case, it appears that Radhey Lal Shah had become a a major on 14th March, 1969. The assessment year 1968-69 was closed on 31st March, 1969. Up to that date, the period of six months given to a minor to make his option about the joining of the firm as a partner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re in respectful agreement with the view taken in the case. Shri Ashok Gupta, counsel appearing for the revenue, however, contended that the view in National Medical Stores' case [1974] UPTC 24 (All) requires reconsideration inasmuch as a contrary view has been taken on the said question by two Division Benches of this court in Ganesh Lal Laxmi Narain v. CIT [1968] 68 ITR 696 (All) and Ram Narain Laxman Prasad v. ITO [1972] 84 ITR 233 (All). We have gone through the aforesaid said two cases relied on by the learned counsel for the revenue but fail to find anything in them which can be said to be in conflict with the decision in National Medical Stores' case [1974] UPTC 24 (All). It is no doubt true that these were also the cases where min ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er for the purposes of the Act, the question of waiting for six months as provided for in s. 30 of the Partnership Act does not arise inasmuch as the moment he becomes a major he becomes automatically a partner and thus the partnership deed is required to be drawn up afresh. The definition of partner given in s. 2(6B) of the old Act, which is same in sub-s. (23) of s. 2, as said by the Supreme Court in CIT v. Dwarkadas Khetan Co. [1961] 41 ITR 528 (SC) is designed to confer equal benefits upon the minor by treating him as a partner, it does not render a minor competent to be full-fledged partner. The Supreme Court further observed that for that purpose the law of partnership must be considered apart from the definition of the partner as g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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