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TMI Blog1982 (3) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... ely, while Hemant Brothers (P.) Ltd. promised to contribute Rs. 55,000 in cash as and when required. The ITO, however, found that no business of any kind was done, there was no mutation of any plot of land in favour of the firm and there was also no contribution in cash by Hemant Brothers (P.) Ltd. It was further found by the ITO that the firm came to an end on 6-1-1976 and, therefore, did not exist during the previous year relevant to the assessment year 1977-78. The ITO was not convinced with the assessee's reply that since according to clause (8) of the partnership deed dated 15-7-1975, the final accounts of the partnership were to be drawn on 30th June, the final accounts could not be drawn till 30-6-1976 and, therefore, the firm should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee when the appeals came up for hearing on 2-3-1982. The appeals are, therefore, decided on the basis of the material on the record and the submissions of the learned departmental representative, Shri Jauhari. 5. The record shows that the order of the AAC confirming the action of the ITO in refusing to register the assessee-firm is attached on the ground that there was a proper partnership deed in which there was mention of capital contribution of the partners, their profit-sharing ratios and the nature of the business and all the other legal requirements for registration had been complied with and, therefore, simply because on account of some unfortune circumstances, the assessee-firm could not commence business there was not s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Income-tax Act. It is true that in the case of Mandsaur Starch Chemicals v. CIT [1981] 127 ITR 727 their Lordships of the Madhya Pradesh High Court have taken a contrary view that simply because no business was carried on during the relevant previous year, it cannot be said that a valid partnership was not in existence and registration could not be refused on this ground alone. However, with great respect to their Lordships of the Madhya Pradesh High Court, we are more inclined to follow the rulings of the Bombay High Court and the Mysore High Court. We, therefore, hold that since the partnership did not carry on any business whatsoever till it ceased to exist on 6-1-1976 when it was dissolved, it cannot be said that there was a firm a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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