1974 (11) TMI 36

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..... ort business under the name and style of National Roadways. The firm was constituted by an instrument of patnership executed by 14 individuals as partners. The partnership came to be constituted under the following circumstances. All these 14 partners had individual advanced moneys to the total extent of Rs. 77,000 to one Sena Manuswamy Mudaliar, who was operating two buses on two different routes .....

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..... er section 184 of the Income-tax Act, 1961, to the Income-tax Officer, Kancheepuram, for registration of the firm. The Income-tax Officer considered that the firm was exploiting the route permit granted to Sena Munuswamy Mudaliar in an illegal manner without getting the route permit transferred in its name. In this view, he refused registration. But the Appellate Assistant Commissioner held that t .....

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..... s was in the name of a third party was ab initio void and punishable under the rules. In this view, the Tribunal held that the partnership itself was illegal and, therefore, not entitled to the benefit of registration under section 185 of the Act. At the instance of the assessee the following question has been referred : " Whether, on the facts and in the circumstances of the case, the assessee-f .....

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..... under section 26A of the Indian Income-tax Act, 19 22, corresponding to section 185 of the Income-tax Act, 1961. This court took the view that though the firm was the owner of the lorries and operating them, the partnership cannot be regarded as illegal merely because the permits in regard to them stood in the names of their original owners and had not been transferred to the firm. The learned cou .....

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..... self. It might be in part performance of that agreement the said Sena Munuswamy Mudaliar handed over possession of the vehicles to the assessee. But that does not mean that there is actually a transf er effected. So long as there is no transfer of the certificate in the name of the firm, in law there was no valid transfer. The decisions relied on by the Tribunal were, therefore, not applicable. Th .....

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