9911796707
TMI Blog1984 (1) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee's claim for standard deduction of Rs. 2,342 under s. 16(i) of the Act. The facts in brief are: the assessee along with his mother-in-law Smt. Ramaben Laxmidas Ganatra had entered into partnership to carry on business under the name and style of M/s Vogi Industrial Corporation. By an agreement entered into between M/s Yogi Indst. Corpn. and MICO. The former was appointed as a dealer of the products manufactured by the latter. Smt. Ramaben Laxmidas Ganatra expired on 4th Nov., 1974. Thereafter, from 5th Nov., 1974 to 28th Feb., 1975 the assessee carried on the business as a sole proprietor. Under a deed dt. 24th Feb., 1975 the assessee and his wife Smt. Nalini G.Tanna had entered into partnership to carry on the proprietary b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceived by the assessee had the same character as a share of profit from the business of the firm. 6. The ld. counsel for the assessee vehemently argued that the IT Authorities were not justified in denying the assessee's claim for standard deduction as according to him, since the firm and its partners are two separate and distinct entities, there was a relationship of a master and servant between them. He further submitted that if the provisions of ss. 40 (b) and 67 of the Act are properly appreciated then, the assessee would be entitled to claim standard deduction as contemplated under s. 16(1) of the Act. In support of his submission, the ld.counsel for the assessee relied on the order of the Tribunal in the case of Mohamad Ibrahim Sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retains the same character of the income of the firm". 8. We may mention that in support of his submissions the ld. counsel for the assessee invited our attention to various documents contained in the paper book prepared by him. However, we find from the deed of partnership dt.24th Feb., 1975 that no mention was made regarding the agreement entered into between M/s Yogi Industrial Corporation and the assessee on 25th Sept., 1974. Once one of the two partners in a firm dies then there cannot be a partnership consisting of one partner only. In other words, on the death of Smt. Ramaben Laxmidas Ganatra the assessee became the sole proprietor of the business from 5th Nov., 1974. Therefore, in order to keep alive the agreement dt. 25th Sept. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al income of the assessee by virtue of provisions of s. 64(1) of the Act. 11. Before the AAC the assessee took up a stand that his wife was not made partner of M/s Yogi Industrial Corporation on her own volition but in order to keep dealership agreement with MICO, the assessee was forced to take her as a partner as MICO insisted upon an existence of a firm. It was further submitted that since the amount standing to her credit was already there in the past and the interest earned thereon was never included in the total income of the assessee, the IT Authorities ought not to have included Rs. 8,858 being the interest earned on the credit balance of his wife, in the total income. The AAC however, was not impressed by the submissions made on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot find any merit in the stand taken on behalf of the assessee. We are constrained to observe that the ld. counsel for the assessee ought not to have relied upon the evidence contained at pp. 16 to 26 of his Paper Book as the same related to the period after the end of the relevant accounting year. In the course of his argument, the ld. counsel for the assessee had also submitted that the assessee's wife was taken as a partner in view of the wish expressed by his mother-in-law. However, this fact also does not help the assessee. We have gone through the distributorship agreement contained at pp. 16 to 22 of the Paper Book (even though not relevant for the year under appeal) thinking that the said terms and conditions would have contained in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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