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TMI Blog1991 (11) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... thod of accounting was mercantile and the accounting period was the year ending on 30-9-1984. The assessee was dealing in electrical goods etc. Return was filed showing income of Rs. 5,880. Assessment was framed on 28-3-1988, on total income of Rs. 50,630 under section 143(3) of the Income-tax Act, 1961. 4. In the present case, a deed of partnership was drawn on 15-3-1984, between Raj Kumar Agarwal as karta of his HUF, Smt. Rita Kumari and Km. Smita Arora. The same was filed before the learned ITO on 14-5-1984. The ratio of shares was 10%, 40% and 50% respectively. It was noticed by the ld. ITO that the partner, Km. Smita Arora was the daughter of the male partner, Shri Raj Kumar Agarwal. It was discovered that the two ladies partners ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no justification for refusing registration. It was said to be not the ld. ITO's case that firm was not genuine. The ratios in the cases of Chitra Cinema v. CIT [1972] 86 ITR 203 (All.), United Patel Construction Co. v. CIT [1966] 59 ITR 424 (MP) and Himalaya Engg. Co.'s case were relied upon. Reliance was also placed on the finding of Jaipur Bench of the Income-tax Appellate Tribunal in the case of Rajesh Corpn. v. ITO [1988] 25 ITD 420 (Jp.) (TM). The ld. DC (A) considered the facts available on file and the submissions and the ratios and allowed registration to the firm for the year under consideration. 6. Hence the present appeal by the Revenue before us. The ld. D.R. Shri S. K. Sagar supported the ld. ITO's order on the point and furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting parties have been heard and record carefully perused. In the present case, the registration is seen to have been denied for two reasons namely : (a) That the lady partners had not contributed capital, and (b) They were also not participating in the conduct of the assessee's business. The existence of these two conditions is not in doubt, but at the same time, it is not seen to be the Revenue's case that any partner was the benamidar of another. The ld. ITO also did not find that the firm was non-genuine. It was also not their case that the firm during the relevant period was not doing business In accordance with the Deed. The registration is seen to have been refused in the above circumstances. 11. When the matter came befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the second reason for denial also goes. 14. Since both the reasons for denial are not found to be tenable by the above judicial pronouncements, the ld. DC(A) in our view correctly vacated an erroneous finding. In such a finding, we do not see any omission or mistake and, therefore, no merit in the ground taken before us. In fact, the conditions pointed out by the ld. ITO were not required to be there for granting the registration. The conditions which were required to be there, are as under : " The following conditions are to be satisfied in order that a firm may be entitled to registration : (i) the firm should be constituted under an instrument of partnership specifying the individual shares of the partners ; (ii) an application o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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