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TMI Blog1980 (6) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... and 1975-76 was also refused. The assessee has, therefore, come up with the common point of dispute in the present appeals before us. 3. The assessee's ld. counsel, Shri Aggarwal submitted to us that in her statement recorded by the IT Inspector on commission on 28th Sept., 1975, Smt. Chameli Kunwar not only admitted that she was a partner of the assessee firm, she also told who were the other partners, what was the business of the assessee firm and the other particulars which clearly showed that she was a genuine partner. Proceeding further, she admitted that the partnership came into existence during the previous year relevant to the asst. yr. 1973-74 and the date when her statement was recorded was 28th Sept., 1975 and, therefore, sim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Agarwal as laid down by the Hon'ble Supreme Court in the case of K.D. Kamath Co. vs. CIT (1) only two conditions are required for the existence of a firm, firstly that there must be an agreement to share the profits or losses of the business and secondly that the business must be carried on by all the partners or any one of them acting for all and both the conditions had been satisfied in the instant case. It was also pointed out by him that the assessee firm incurred losses for the asst. yr. 1973-74 as well as for the asst. yr. 1975-76 and it was only for the asst. yr. 1974-75 that there was a profit in this firm and the assessee's share came to a loss Rs. 2,095 for the asst. yr. 1973-74 a profit of Rs. 23,548 for the asst. yr. 1974-75 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tner, it cannot lead to a inference that he was not a genuine partner or that firm was not genuine. Reference was also made by him to a number of decisions by the IT Tribunal report in (1979) Taxation Vol. 53 (6) 97 and Vol. 55(6) 126, wherein even on much more adverse circumstances, the claim for registration was allowed by the Tribunal's. Summing up, Shri Agarwal submitted before us that the claim for registration was genuine and ought to have been allowed by the Revenue authorities. 4. On the other hand, the ld. Deptl. Rep. Shri Chatterjee submitted to us, relying on the rulings of the Hon'ble High Court of Madras in the case of E.A.E.T. Sundaraja vs. CIT (3), and the Hon'ble High Court of Andhra Pradesh in the case of Madhusudan Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the firm at any time during the previous year Benamidar of any other partner to whom the first mentioned partner does not stand in the relationship of a spouse or minor child. Summing up, Shri Chatterjee vehemently argued before us that the Revenue authorities rightly held that the firm was not genuine and in refusing to register the firm. 5. The assesses learned counsel, Shri Aggarwal in reply pointed out that Smt. Chameli Kr. was living in the village several miles away from where the firm was situated and where Shri Rameshwar Singh was living and, therefore, it cannot be said that she was absolutely dependent on Shri Rameshwar Singh and was not able to look after herself. 6. We have carefully considered the rival submissions. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oss but that by itself did not justify her withdrawing from the partnership because loss or profit was incidental to business. The Hon'ble Supreme Court in the case of CIT vs. Daulat Ram Rawatmull(5) has laid down that for the purpose of deciding whether a person is a Benamidar of another person, we have to find out whether the source of the investment came from the other person or whether the ultimate destination of the income was the other person. Viewed in this context, inspite of a specific query by the bench, the ld. Deptl. Rep., Shri Chatterjee was not able to show to us that even when the investments were made by Smt. Chatterjee was not able to show to us that even when the investments were made by Smt. Chameli Kr. not in the first y ..... X X X X Extracts X X X X X X X X Extracts X X X X
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