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TMI Blog1983 (11) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... i Gopalbhai to partnership. This partnership was given effect from 12-11-1977. The Commissioner took the view that a valid partnership deed under the Indian Partnership Act, 1932, could not be said to have been in existence from 12-11-1977 onwards and, hence, no registration could have been granted. He has relied upon the decision of the Supreme Court in the case of R.C. Mitter Sons v. CIT [1959] 36 ITR 194 which, according to him, covers the cases where a partnership had been brought into existence by an oral agreement between the parties which may subsequently be reduced to writing and the instrument would naturally record all terms and conditions of contract between the parties at the initial stages which had not been reduced to writin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any liability. He also argued that if the new partnership was invalid then the whole partnership would continue and so there was no loss of the revenue and that, therefore, section 263 of the Income-tax Act, 1961 (' the Act ') was not applicable. He has relied upon the decision of the Gauhati High Court in the case of P.N. Sarmah v. CIT [1980] 125 ITR 553 where it was held as follows : "...On a perusal of sections 30(5) and (7) it becomes clear that if during the subsistence of the partnership a person who was admitted, at the time when he was a minor, to the benefits of partnership does not elect to become a partner within six months of his attaining majority would become a partner after the expiry of the said period (six months) and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... based on the Gujarat High Court decision in the case of Laxmichand Hirjibhai is concerned, we are in agreement with the submissions of the learned departmental representative because in that case the question of validity of partnership deed which goes to the root of the matter, was not involved. 5. In this case Shri Gopalbhai, when he became a major, entered into partnership and the effect thereof was that he would take on liabilities, if any, during the period of his minority. A major is capable of taking on liabilities and, therefore, we do not see any reason why Shri Gopalbhai could not have taken upon himself his own liabilities, if any. The liabilities or profits would be known at the end of the accounting period when Shri Gopalbha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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