TaxTMI 
TaxTMI 
TaxTMI 
1978 (10) TMI 92
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....is of the above copy and facts mentioned by the AAC and thus brought to our notice during the course of hearing. 3. The firm M/s Rama Krishna Soap Mills was in existance prior to 1st April, 1964. With effect from 1stApril, 1969 the constitution was as under:- Ragunath khurana 25 per cent Amar Nath Khurana 25 per cent Smt. Kamala Khurana 25 per cent Smt. Nirmala Khurana 25 per cent With effect from 1st April, 1969, Miss Indu Khurana, daughter of Smt. Kamala Khurana, one of the partners of the assessee-firm was taken in as partner with 10 per cent share while the share of Smt. Kamala Khurana was reduced to 15 per cent. Before the ITO it was claimed that Miss Indu Khurana received two gifts of Rs.10,100 from each of her parents i.e.....
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....allenged the genuineness of the firm." 5. During the course of the assessment proceedings for the asst. yr. 1971-72, the ITO examined the assessee's claim for registration. He disallowed the claim of registration on the ground that one of the partners, Miss Indu Khurana, was not a genuine partner but was, in fact, a benamidar of her mother, Smt. Kamala Khurana. The ITO observed that Smt. Kamala Khurana was a financing partner having 25 per cent share before 1st April, 1969 and by admitting her daughter, Miss Indu Khurana by by surrendering 10 percent of share in favour of Miss Indu Khurana, she wanted to established her daughter out of natural love and affection. He, therefore, held that Miss Indu Khurana was only a benamidar of Smt. Kamal....
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....enuine partner in this firm and there was no material on record to hold that she was a benamidar of her mother, Smt. Kamala Khurana. The AAC accepted the above contention and held that Miss Indu Khurana was a genuine partner in her own right and she was not a benamidar of her mother. He, therefore, set aside the order passed by the ITO under s. 185 and directed him to allow registration to the assessee-firm. It is against this order that the Department has come up in the present appeal. 7. We have heard the learned representatives of both the parties at length and have gone through the record and, in our opinion. There is no merit in this appeal. Miss Indu Khurana was taken in as a partner w.e.f. 1st April, 1969 and even during the asst. y....
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....early establish that Miss Indu Khurana was enjoying her share of income from the assessee firm independently and she was not a benamidar of her mother. This apart, Miss Indu Khurana was a major, the gift made to her by Smt. Kamala Khurana was accepted as a genuine gift and the latter was assessed to gift tax on the amount of gift made by her to Miss Indu Khurana. It is the ordinary presumption of law that the apparent state of affairs is real unless the contrary is proved. In the present case, the apparent state of affairs is that Miss Indu Khurana joined the assessee firm as an independent partner by investing a sum of Rs.10,100 which she received as gift from her mother. The above gift was accepted as genuine by the Department. Her share ....