9911796707
TMI Blog1977 (9) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... at the firm was not entitled for registration under section 27 of the Kerala Agricultural Income-tax Act, 1950 ? and (2) Whether, on the facts and in the circumstances of the case, the Deputy Commissioner was competent to exercise his suo motu powers of revision to set aside the finding of the officer that the requirements of section 27 have been satisfied by the applicant ? " The assessee applied for registration of a firm constituted by the deed of partnership dated September 15, 1966. The accounting period for the year during which the partnership was constituted was to run out on June 30, 1967. The registration was applied for under section 27 of the Agricultural Income-tax Act, 1950, which reads as follows: " 27. Procedure in reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 34 of the Act, disallowed registration of the firm on two grounds: (1) that no accounts had been kept by the firm; and (2) that the share of the profits shown in the application for registration did not correspond to the state of affairs disclosed by the partnership deed. The first of these grounds is manifestly untenable. Not only is there no warrant for importing the requirement of the keeping of accounts by the firm or by the partnership into the provisions of the section or the terms of the rules we have extracted above, but judicial decisions are also against such a requirement being posited. It is enough to refer to the ruling of a Division Bench of this court in Kurien and George v. Commissioner of Income-tax [1967] 63 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd above his share for such contribution. No interest shall be payable on the amounts contributed towards the capital of the partnership ............. 6. The profits and losses of the partnership business shall be divided and borne between each of the partners in the proportion in which each of the partners have contributed towards the capital of the partnership, provided that future contributions other than the initial contribution towards the capital shall not be counted for division of profits or losses unless such contributions be made at least three months prior to the close of the accounting year of the partnership." In the application for registration, the division of profits as between the partners who had contributed initial ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being stretched to yield the conclusion that non-specification in the application for registration of the ratio in which the profits are to be shared between the partners as stated in the deed of partnership, would entail a rejection of the application. The Deputy Commissioner was, therefore, not justified in rejecting the application on this ground. On the facts disclosed there is again another difficulty. Even assuming that the ratio of the share of the profits had to be in accordance with what is shown in the deed of partnership, we find that the deed of partnership does not, in terms, specify the ratio in which the profits had to be shared between the partners. The provision in clause (6) of the deed is with regard to the sharing of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
