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TMI Blog1961 (1) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... poses of assessment in the hands of the appellant firm and refusing to renew registration of these firms under section 26A of the Income-tax Act. There was originally a firm carrying on business in cloth and yarn in the name and style of " Jagannath Jewanmal " at 37, Armenian Street, Calcutta of this firm, Ladhuram, Ganpatrai and their brothers and several outsiders were partners. On account of disputes between the partners, this firm was dissolved sometime in the year 1943. In anticipation of dissolution of the firm or shortly thereafter, six firms were started and separate deeds of partnership were executed in respect thereof. The deed of partnership in respect of firm Ladhuram Taparia was executed on October 16, 1941, and the firm was registered with the Registrar of Firms on July 19, 1943. The firm, it was claimed by the appellants, commenced business on February 28, 1941, and consisted of three partners, Ladhuram Taparia, Ganpatrai Taparia and Bhairodhan Maheshwari. Firm Ladhuram Taparia was registered for purposes of income-tax under section 26A in the assessment years 1942-43, 1943-44 and 1944-45. Beside the firm of Ladhuram Taparia, the other five firms which came into ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1945-46, firms Nos. I, II, III and V were registered under section 26A of the Income-tax Act and tax was assessed on that footing. Firms Nos. IV and VI submitted their returns for the first time for assessment of income-tax for the assessment year 1945-46. In the course of the assessment proceedings, the Income-tax Officer (Central) Circle II, Calcutta, having received information that Ladhuram and his brother Ganpatrai had started diverse concerns in different names and they had also started innumerable shops benami and that all these businesses belonged to Ladhuram and his brother Ganpatrai, started investigation into the status and ownership of the six firms. The Income-tax Officer called for information from banks in which accounts were maintained on behalf of the different firms. He also examined Bhairodan Maheshwari, Sovachand, Hanumanbux and Ganeshmal and issued subpoena for the examination of Rupnarain Gaggar, Chunnilal Lakhotia and Kisenlal Karwa, but these three persons did not appear before him. After a detailed examination of the books of account, the Income-tax Officer held that: " The nature of the business of firms I to IV is practically the same. The businesses a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t a partner. According to the Income-tax Officer it appeared from the declarations given to the banks that " little discrimination " was observed between Ladhuram and his sons in the matter of control of funds of the firms. He, therefore, concluded that all the six firms belonged to one and the same group of persons, namely, Ladhuram and his sons and Ganpatrai and that Ladhuram was the " real man behind the scene and he played the principal part ". The Income-tax Officer accordingly refused to register the firms under section 26A of the Income-tax Act for the year of assessment 1945-46 and treated the aggregate income of the six firms as assessable in the hands of firm No. 1. The Appellate Assistant Commissioner, Range " C ", Calcutta, agreed with the view of the Income-tax Officer that the partnership deeds were not genuine and were not intended to be acted upon and that the firms belonged to a group of persons Ladhuram, Ganpatrai and their respective sons and the outsiders had no interest in the business of the firms. The Appellate Assistant Commissioner, however, reduced the assessable income by Rs. 10,756 but subject to that modification, dismissed the appeal. In appeal against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the profits of the several firms ? The Tribunal having rejected this application holding that no question of law arose out of their order, the appellants applied to the High Court of Judicature at Calcutta that the Tribunal be called upon to submit a statement on those five questions. The High Court rejected this application summarily. In these appeals with special leave counsel for the appellants conceded that the High Court was right in declining to call for a statement of the case from the Tribunal on the first three questions. It is manifest that question No. 2 does not raise any question of law and question No. 1 was not raised before the Tribunal. Again, because a partnership is registered under the Partnership Act, the income-tax authorities are not obliged to register it under section 26A. The concession made by counsel for the appellants was, therefore, properly made. It was urged that statements of accounts prepared by the appellants and submitted to the Tribunal were not taken on the record and were not considered. But these statements, it is admitted were prepared from the books of account produced before the income-tax authorities. These statements might have f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that in respect of this item, the Tribunal should have given a considered finding. We do not think that failure by the Tribunal to deal with this item expressly justifies interference by this court. The Income-tax Officer found that " Jagadishprosad & Co., Jagmohan Jayantilal, Jewanbhai Jewandas, Ramgopal Agarwala and Rupnarain Gaggar " were merely benami concerns of Ladhuram and his brother, Ganpatrai. He observed that the genuineness of the accounts had not been established although the appellants were given an opportunity to do so. The appellants in their written statement dated January 4, 1950, merely averred that the nature of the credits will be apparent from the " narrations " in the book of account " which will speak for itself. " He further observed : " The explanation given is not at all convincing and absolutely no evidence has been produced to substantiate the nature and source of the credits appearing in accounts Nos. (1) to (5) above as well as the genuineness of those parties. In view of what has been fully discussed before it appears to me quite clear that the credits in those accounts represented nothing but assessee's undisclosed income." The Appellate Assista ..... X X X X Extracts X X X X X X X X Extracts X X X X
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