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Bhikari Lal Ram Kumar Sarraf Vs. Addl. Commissioner of Income Tax. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAllahabad High Court
Decided On
Case NumberI.T.R. No. 373 of 1974
Reported in(1978)7CTR(All)115
AppellantBhikari Lal Ram Kumar Sarraf
RespondentAddl. Commissioner of Income Tax.
Cases ReferredIn C.I.T. Lucknow vs. National Medical Stores
Excerpt:
- - this view was upheld on appeal by the appellate assistant commissioner as well as the tribunal......a change in the constitution of the firm had taken place and the firm should have applied for a fresh registration, which had not been done. he also found that the firm had not executed a fresh partnership deed. this view was upheld on appeal by the appellate assistant commissioner as well as the tribunal.3. at the instance of the assessee, the tribunal has referred the following question of law for our opinion :-'whether, on the facts and in the circumstances, of the case, the tribunal was justified in holding that the assessee firm was not entitled to status of a registered firm for the assessment year 1967-68 ?'4. in c.i.t. lucknow vs. national medical stores, gorakhpur a bench of this court has held that in view of s. 30(5) and (7) of the indian partnership, act, 1932, there is no.....
Judgment:

Satish Chandra, J. - Messrs. Bhikharilal Ram Kumar was a partnership firm constituted under a deed dated October 6, 1957. It consisted of three partners. Two minor sons of one of the partners were also admitted to the benefits of this partnership. One of the minors attained majority on June 14, 1966. No new partnership deed was drawn up. The Assessee sought the benefit of continuance of registration by applying in Form No. 12 on August 12, 1967 for the Assessment year 1967-68. The relevant previous year for this assessment year ended on October 22, 1966. It is thus evident that the minor attained majority before the expiry of six months from the end of the previous year.

2. The Income Tax Officer refused to renew the registration on the ground that with the attainment of majority by the minor, a change in the constitution of the firm had taken place and the firm should have applied for a fresh registration, which had not been done. He also found that the firm had not executed a fresh partnership deed. This view was upheld on appeal by the Appellate Assistant Commissioner as well as the Tribunal.

3. At the instance of the Assessee, the Tribunal has referred the following question of law for our opinion :-

'Whether, on the facts and in the circumstances, of the case, the Tribunal was justified in holding that the assessee firm was not entitled to status of a registered firm for the assessment year 1967-68 ?'

4. In C.I.T. Lucknow vs. National Medical Stores, Gorakhpur a Bench of this Court has held that in view of S. 30(5) and (7) of the Indian Partnership, Act, 1932, there is no change in the constitution of the firm for a period of six months from the date when the minor attains majority or till he actually elects to become a fulfledged partner of the firm and hence there was no necessity for the execution of a fresh partnership deed or applying for fresh registration of the firm. The assessee was entitled to renewal of registration. Following this decision, we answer the question referred to us in the negative in favour of the Assessee and against the Department. The Assessee will be entitled to costs which we assess at Rs. 200/- (Rupees Two hundred) only.


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