TaxTMI 
TaxTMI 
1982 (1) TMI 98
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....1. The said AAC has further erred in holding that in view of the Explanation to s. 185(1), the two lady partners are benamidars for their husbands without material or evidence on record and without judicial appreciation of the correct facts of the case and law on the subject. 4.3. The appellant contends the Explanation to s. 185(1) has no application to the facts and circumstances of the case and the said AAC has exceeded his jurisdiction in doing so when such finding was never given by the ITO in his assessment order and the AAC has no jurisdiction to assume the power of the ITO and Act as an ITO to hold that the said two ladies are benamidars for their husbands when the ITO himself in his assessment order holds that the appellant is a ....
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....n fact Shri Mithalal, a common partner in both the firms brought onto existence a new entity i.e., with self, his wife, his daughter-in-law and the son, as partners. The ld. ITO, thus, negative the assessee's claim for registration with the following observations : "It is only a branch business of that firm From the facts discussed above, I have no hesitation to hold that the income of M/s. Mithalal Ashokkumar belongs to M/s Abhaykumar Jaswantkumar, Indore, and the genuine firm known as M/s. Mithalal Ashokkumar has ever come into existence which can be granted registration. Since the assessee filed its return separately in the status of the firm, the same has been disposed of purely protective measure in the status of AOP vide my assessm....
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....tion on the basis of surmises and in total absence of evidence. He further contended that the assessee paid the rent for the business premises occupied by it and the lady partners were not and cannot be said as benamidars of their husbands. It was also contended that these ladies arranged their share-money through identifiable sources. 7. Shri Kasbekar further submitted that the reasonings adopted by the ld. ITO and the ld. AAC are not the same. He continued that the ld. ITO considered the assessee as a branch of that firm i.e. M/s. Abhaykumar Jaswantkumar, whereas the ld. AAC confirmed the ld. ITO's action considering the ladies as benamidars. He continued that the absence of active participation in the business of the assessee by the l....
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.... to believe or could not lead to irrefutable conclusion that the firm was genuine and warranted registration. Since the limitation was involved, the ITO finalised the assessment on protective basis subject to the ultimate order. The ld. D.R. also submitted that the case laws relied upon by the A.R. cannot be of any help to the assessee, since the facts and circumstances are different. 9. In reply. Shri Kasbekar submitted that there is no evidence that the same management was looking after both the firms. Moreover, he contended that in terms of clauses of the deed, any partners is competent to manage the affairs of the firm. Business of the assessee also was said to be different and that rectification could not be an answer when the partn....
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....thalal, the premises was common and the nature of the business was the same. In these circumstances, the ld. ITO came to the conclusion that the assessee was not and could not be a genuine firm in its own right. He appears to have come to the right conclusion that the assessee was some sort of an extension of the old firm and the some constituents of the assessee were quite ignorant and passive about its business activities. In these circumstances, the inference drown by the ld. AAC that the ladies could be benamidars of their husbands also could not be without a cogent justification. It is, therefore, safe to infer that the revenue authorities were not altogether unjustified to negative the assessee's claim for registration. 12. The ld.....