2010 (11) TMI 763

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.... registered firm/firm. We have heard standing counsel appearing for the appellant and senior counsel Sri V. Ramachandran and advocate Sri P. Balakrishnan appearing for the assessee-firms.   2. There is no controversy on the facts inasmuch as all the assessee-firms carried on retail business in liquor in the bar hotels run by them with a single abkari licence (FL-3) obtained by one of the partners and the other partners did not have separate individual licences issued by the excise authorities. While counsel for the Revenue relied on earlier three-member Bench decision of the Supreme Court in Bihari Lal Jaiswal v. CIT reported in [1996] 217 ITR 746 (SC), counsel for the assessees relied on the later judgment of the Supreme Court in CIT....

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....isions of the Abkari Act and Rules, no matter the licence was obtained only by one of the partners of the firms which carried on the business.   4. Rule 19 of the Foreign Liquor Rules framed under the Kerala Abkari Act and condition No. 13 of the FL-3 licence issued to bar hotels constituting the conditions of licence about which violations are alleged by the Department are extracted hereunder :   "Rule 19 :   Under no circumstances shall any licence obtained under this notification be sold, transferred or sub-rented without the previous sanction of the Excise Commissioner."   "Condition No. 13 :   Licensee shall not lease out, sell or otherwise transfer his licence without the written consent of the Excise Com....

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....ng on business with the licence obtained by one of the partners. All the assessee firms in this case have been carrying on business in liquor in the bar hotels with the licence held by one of the partners and other individual partners do not have separate FL-3 licences. FL-3 licence issued under the Foreign Liquor Rules is only for one year and it is renewed on an year to year basis on payment of substantial amount towards annual licence fee. The Excise Commissioner granted renewal to all the assessee-firms knowing well that each and every partner of the firm does not have separate individual licences and the firm carries on business with the single licence issued in the name of one of the partners. So much so, the irresistible conclusion t....