9911796707
TMI Blog1980 (12) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... agal obtained majority on 14th Jan., 1974 and N.S. Yavagal on 4th June, 1975. On 7th June, 1975 a fresh deed of partnership was executed, providing for sharing of profits and losses to all the five partners, including the two Yavagals mentioned above. The date of commencement of this partnership was mentioned to be 1st April, 1975 on which date, Shri N.S. Yavagal was a minor but he was made a full-fledged partner. The partnership deed, therefore, being contrary to law, the ITO should not have granted registration. He, therefore, initiated proceedings under s. 263 of the IT Act. 2. In response to the show cause notice, the assessee's contention was that there was nothing in the partnership deed to show that it had come into existence befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question of the validity of any partnership agreement in that case. He, therefore, set aside the assessment order and the order under s. 185 with a direction to the ITO to refuse registration and assess the assessee in the status of an unregistered firm. The assessee has, consequently, come up in appeal before us. 3. We have heard the representatives of the parties at length and, in our opinion, the order of the Commr. in question, cannot be sustained. To start with, the matter had been considered by the 'D' Bench of the Tribunal at Madras in ITA No. 481 (Mds)/1976-77. In that case, a minor had attained majority on 1st Jan., 1373. By a deed of partnership, he ratified all the transactions of the partnership from 1st Jan., 1972 onwards an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to third parties for all acts of the firm done since he was admitted to the benefits of partnership, and (b) his share in the property and profits of firm shall be the share to which he was entitled as a minor." It was contended by the Deptl. Rep. that any agreement by any person, accepting any liabilities in respect of any loss, incurred by the firm of which he was admitted to the benefits during his minority would be contrary to the above provisions of law and, therefore, illegal because this sub-section does not provide for saving any contract to the contrary. We are afraid, the position of law has been entirely misunderstood by the ld. Deptl. Rep. This sub-section creates a presumption in case minor admitted to the benefits o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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