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TMI Blog1977 (1) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... f the firm was also divided between the two partners in accordance with the terms of the partnership deed. On the basis of this evidence it was claimed that the firm was genuine and should be registered under s. 185 of the Income-tax Act. 3. The Income-tax Officer, however, on examining Shri Ram Gopal found that he had no knowledge about the business of the firm which was carrying on the business as money lending brokers. The claim that Shri Ram Gopal had invested his capital of Rs. 1100 out of the funds received by him at the time of his marriage in 1967 was also found to be not supported by any evidence. The source of the capital claimed to have been invested by Shri Ram Gopal was thus held to have remained unexplained. Keeping all the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appellate Assistant Commissioner had erred in annulling the assessment made by the Income-tax Officer on the firm on a protective basis. 6. Shri Jain learned advocate of the assessee claimed that the authorities below were not justified in rejecting the claim for registration. Referring to the partnership deed at page 1 of his paper book Shri Jain pointed out that Shri Om Prakash who was earlier carrying on the business as a money landing broker had taken Shri Ram Gopal as his partner. The deed laid down the terms of the partnership and the shares of the partners. The firm was registered with the Registrar of firms. The constitution of the firm was also declared to the Bank of Baroda with which the firm had its account. The profit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the order of the Income-tax Officer rejecting the assessee's claim for registration. Referring to the statement of Shri Ram Gopal recorded by the Income-tax Officer, Shri Basu claimed that this statement left no doubt that Ram Gopal was not engaged in the business of this firm. There was, therefore, no reason why he should have been taken as a partner. The business continued to be the proprietorship business of Om Prakash and there was no firm in existence. Referring to the facts mentioned in the order of the Appellate Assistant Commissioner, Shri Basu also supported the finding that Shri Ram Gopal was not capable of making investment of Rs. 1,100. 8. The facts mentioned above would should that Om Prakash was earlier carrying on busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The authorities cited by Shri Jain to support his claim do not have any application because the assessee has failed to prove that Ram Gopal was actually a partner in the business. Accordingly we hold that on the basis of the evidence before them the authorities below were justified in refusing the assessee's claim for registration. We would however, make it clear that our this decision would not be a bar to the assessee's claim for registration in subsequent years in case Shri Ram Gopal is actually found to be engaged in business of the firm in those years. 9. Coming to the addition of Rs. 1,100 on account of the deposit appearing in the name of Ram Gopal we feel that this addition was not justified. Shri Ram Gopal was earlier a partn ..... X X X X Extracts X X X X X X X X Extracts X X X X
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