9911796707
TMI Blog1981 (12) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... his assessment order dated 30-11-1978. On perusal of records of the assessment of the assessee, the Commissioner found that one of the clauses in the dissolution deed mentions that as it was not possible to ascertain the value of intangible rights such as goodwill, quota rights, selling agency rights and business connections, the retiring minors in consideration of their agreement to allow the other remaining partners to use such intangible assets were allowed payments of Rs. 96,000. According to the Commissioner, the provisions of the Indian Partnership Act clearly shows that the minors had no right in the assets of the firm and as such the ITO has committed an error in law in treating them as entitled to payment of fixed sums every month ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidue, if any, shall be divided amongst the partners in the proportion in which they were entitled to share profits. Therefore, it is very clear from the plain reading of the provisions of sections 30 and 48 that the scheme of section 30 is for the benefit of minors and at the time of dissolution the share in the property should be given to the partners in accordance with the share of profit in the partnership firm. In support of his contention he relied on the observations in CIT v. Devson Ltd. [1975] 98 ITR 311 (J K) wherein it is held by their Lordships that minor has equal right in the property of the firm as the major partners in the firm. On the other hand, Shri Harne, the learned departmental representative, contended that the minors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g partners to use intangible assets, the firm will pay to the minors the following amounts: 1. Jayesh B. Mistry Rs. 4,000 per month 2. Lata B. Mistry Rs. 2,000 per month 3. Sangeeta B. Mistry Rs. 2,000 per month ------------------ Rs. 8,000 ------------------ The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d at page 513 of the report as under : "(6) It is true that in view of section 30 of the Partnership Act, a minor though participating in the profits of the firm, is not a partner. A person who is a minor cannot be a member of a firm, he may be admitted to the benefits of the firm but cannot be made personally liable for any liability of the firm. His share in the property of the firm is liable for the obligations of the firm and that share is not more than his right to participate in the property of the firm after its obligation has been satisfied. Such a minor cannot sue the partners for an account of the firm or for the payment of his share of the property or profits of the firm, except when he severs his connection with the firm, in w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are relevant in the sense that they provide guidelines to ascertain the status and position of the minor in the firm and to determine as to what rights he has in the firm in view of the provisions of section 30 read with section 48 of the Partnership Act. In our view, the scheme of section 30 is to give some benefit to the minor or to put him in privileged position in the firm so that his liability in the firm may not extend beyond the share of the minor in the firm. The firm was dissolved and the minors have allowed their rights of assets goodwill, etc., to be used by the continuing partners for which they were entitled under the provisions of section 48 of the Partnership Act (sic). The provisions of section 48(b)(iv) postulates that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... support the claim of the assessee and the Commissioner was not justified in directing the ITO to frame a fresh assessment in accordance with his observations. 9. The second ground raised by the assessee is that the Commissioner has no jurisdiction to take action under section 263 as the appeal has already been decided by the Commissioner (Appeals). We heard the rival contentions. It is pointed out that the issue involved has not been dealt with by the Commissioner (Appeals) in his order dated 1-10-1981. If that is the position, we do not agree with the submission of the assessee's counsel that the Commissioner has no right to invoke the provisions of section 263 when the point regarding section 263 was not dealt with by the Commissioner ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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