TaxTMI 
TaxTMI 
TaxTMI 
1977 (8) TMI 81
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....tween the two firms. (ii) All the employees of R.F.C. are paid salaries by P.F.C. and the employees are on the rolls of P.F.C. R.F.C. has not paid salary at all to any of its employees except Shri B. Munim who was paid nominal salary of Rs. 25 per month. Shri B. Munim drew salary of Rs. 90 p.m., from P.F.C. (iii) The business of the firm had been carried on a at exactly the same place as already discussed above. (iv) The rent payment was paid by P.F.C. only. (v) Telephone, electric and water charges were borne by P.F.C. only and R.F.C. did not contribute anything. (vi) No outsider had any interest in the business of the firms and both the firms and both the firms actually belonged to Shri U, Shri PC, their sons and their father and unc....
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....tners of R.F.C. did not manage or control this firm. It is wrong to say that all the employees of the firm R.F.C. are common with the assessee firm. Shri B. is also Munim of R.F.C. In the firm R.F.C. there are only two employees. It is wrong to say that both the employees of this firm were paid salaries by the assessee firm Simply because the rent, telephone charges of R.F.C. were paid by the assessee, it could not be said that both the firms have one and the same partners of both the firms are related and on account of this fact someone of the assessee firm also looks after the work of R.F.C. The partners of R.F.C. also look after their business. The management and control of R.F.C. has been of its partners. The profits of R.F.C. were enjo....
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....elongs to the assessee. It is common ground that in this year the statements of the partners were not recorded. So, practically there was no fresh material before the Department for coming to the conclusion that the firm R.F.C. really belongs to the assessee firm. R.F.C. maintained regular books of account separately. The profits earned by R.F.C. were enjoyed by it. There is no finding by the Department that the profits of the firm R.F.C. were really enjoyed by the assessee firm. The legal requirements under s. 4 of the Partnership Act to constitute a partnership in law are: (i) there must be an agreement to share the profits or losses of the business. (ii) the business must be carried on by all the partners. (iii) Control and business m....
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....s been of the partners of the assessee firm. The authorities below gave no finding that the firm R.F.C. is not in existence. Actually this firm is in existence and it carries on its business. The capital of P.F.C. is quite separate. It was invested by the partners of the firm. This fact was not disputed by the authorities below. From the evidence on record it is not proved that there was inter-lacing in both the firms. 17. It is correct that telephone charges, rent charges and some electric charges were paid by the assessee firm on behalf of R.F.C. but this fact by itself would not go to prove that both the firms are one and the same. From the evidence on record is proved that the firm R.F.C. has been in existence for the last many years. ....