TaxTMI 
TaxTMI 
1982 (10) TMI 85
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....Smt. Angoori Devi was the widow of one of the sons of Shri Ram Das, Shri Narain Das. They dealt in both cotton and woollen textiles. Following some disputes between the partners and other members of the family, it was decided to reorganise the business. Accordingly, the entire business was divided into woollen and non-woollen business. Business in non-woollen textiles continued to be carried on by Bhagwan Cloth House, which was now re-constituted by dropping Shri. Kanhaiya Lal, Shri. Chetan Kumar and Smt. Bhagwati Devi. In their place, their wives, Smt. Malti Devi and Smt. Shyamwati were taken as partners. There was some change in the profit sharing ratio of Shri Bhagwan Das also, which was raised from 20% to 40%. A new indenture of partnership was executed on the first day of April 1972, under which the non-woollen business of the firm was to be carried on by the new firm, entitled, Bhagwan Cloth House,Aligarh. As far as the business in woollen cloth is concerned, a new partnership, namely, M/s Bhagwan Woollen Agency was formed, in which Shri Kanhaiya Lal, Shri Chetan Kumar and Smt. Bhagwati Devi and Shrimati Navratan Devi were taken as partners. Each one of them had 25% share in ....
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....gainst the finding, revenue took the matter in appeal before the Tribunal. Revenue was able to convince the Tribunal that the AAC had not fully considered all the aspects of the matter arising in the situation. The Tribunal, therefore, set aside the finding of the AAC and directed him to take back the appeal for fresh disposal in accordance with the observations made by the Tribunal. One of the points about which the observations of the Tribunal was given, related to the source of the capital contribution made by Smt. Malti Devi and Smt. Shyamwati. The AAC's finding did not indicate this aspect of the matter, whether the two partners had funds which they could contribute as capital in the new firm. It was also noted by the Tribunal, that although the partnership business of Bhagwan Woollen Agency commenced from1st April, 1972, it was not till October, 1972 that a bank account was opened. The Tribunals also directed the AAC to find out who had introduced Bhagwan Woollen Agency to the principals for the supply of goods which it would be selling to customers. The Tribunals also directed the AAC to ascertain whether the division of the field, in which the two firms were to carry on the....
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....isions of the partnership, was not prevented from purchasing and selling woollen goods. This led the AAC to hold that the division of field in which the two firms were to operate, was not water-tight. M/s Bhagwan Cloth House could start dealing in woollen textiles. He also did not find any support for the claim of the assessee that the reorganisation was caused by the family dispute. He supported the finding of the ITO that it was not clarified by the facts brought on record as to why the two ladies were taken in the firm as partners. Accordingly, he dismissed the appeal of the assessee. 4. The assessee is, therefore, in appeal before us against the finding of the AAC. The ld. counsel for the assessee has submitted that no doubt, the earlier order passed by the AAC, in which his claim for registration was allowed, was set aside by the Tribunal but that did not mean that the finding of facts made by the AAC in that order, were also washed out. The Tribunal has not found those findings to be erroneous. No further fact has been brought in by the AAC against whose order, the assessee is in appeal to contradict or indicate an error in the finding on the AAC. Therefore, as for as his ....
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....ips are concerned, it cannot be said that his examination of the facts can lead to a finding that the two firms were not genuinely constituted. The Tribunal had directed AAC to ascertain the source of the capital contribution by the two lady partners, Smt. Malti Devi and Smt. Shyamwati. These having been satisfactorily explained, we do not find that any significance can be attached to the surmises and conjectures on which the AAC has based his finding that the membership of the two ladies in firms was not genuine. We do not find that a consideration of facts that one of the two ladies has not brought in the entire amount of gift in the partnership or that the other lady partner has made a larger drawing can be relied upon to find that the membership of the two ladies was not genuine. In our view, consideration of the facts, as brought on record, cannot lead to any finding other than that the partnership of these ladies was genuine and could not be doubted. Some more material had to be brought to give any substance or weight to the doubts and surmises of the AAC in the matter and find support for his finding that the membership of the two ladies was not genuine. We also do not find ....