1983 (2) TMI 74

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..... practitioner individually and by the aforesaid deed of partnership dated 14-6-1976, he took his daughter, a graduate of the Bombay University, as a partner in his professional firm giving her a ten per cent share in the profits of the firm. The assessee-firm applied for registration under section 185. The ITO refused to grant registration to the assessee-firm on the ground that the daughter of Shri V.R. Joshi, namely, Miss B.V. Joshi, was not competent to practise as an income-tax practitioner under section 288 of the Act. According to the ITO, both the partners of the assessee-firm were not professionally qualified to carry on the business of the firm, and so the basic requirement for granting registration was not fulfilled. In this view o .....

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..... certain other professions, like professional practitioners in medicine, accountancy or law. They are governed by the Chartered Accountants Act, 1949, Indian Advocates Act, 1964, etc. This extra requirement under the Professional Acts is not necessary if the business or profession carried on by a firm is not governed by any of those Professional Acts. In the instant case, the assessee-firm was acting as an income-tax practitioner under section 288. Its partners were neither Chartered Accountants nor advocates. So, they were not governed by the aforesaid Professional Acts. The only thing that has to be seen is whether a valid partnership firm in the eye of law came into existence by the deed dated 14-6-1976. Shri N.R. Mulla urged that such a .....

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..... by all or by some of them on behalf of all. One of the essential ingredients of a valid firm under the Partnership Act is that the firm should carry on business. The term ' business ' is defined under section 2(b) of the Partnership Act as including profession or vocation. Thus, the activity of carrying on a profession can be regarded as ' business ' within the meaning of section 4 of the Partnership Act, 1932. The assessee before us is evidently engaged in the profession of acting as income-tax practitioner. This activity is evidently a professional activity and so it comes under the definition of business, under the Partnership Act. Consequently, a valid partnership as per section 4 of the Partnership Act was created by the aforesaid deed .....

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