TaxTMI 
TaxTMI 
TaxTMI 
2013 (4) TMI 16
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.... the Partnership deed of 24.05.1974 and the Memorandum of 06.02.1980 together and, on what basis, in maintaining the order of the Commissioner (A) directing registration to the firm for the assessment year 1980-81?" 2. The facts giving-rise to this reference are that M/S Alison Singh & Company, 174, Baluganj, Agra (the respondent) was a partnership firm, engaged in the business of manufacture of shoe lasts, nails and other articles used in the footwear. The respondent firm came into existence through the Partnership deed dated 24.05.1974 duly executed and signed by it's all the four partners, namely Mrs. Zohra Jabeen, Mahendra Pratap Singh, H.N. Sinha and Smt. Nirmala Singh. The firm was registered under the Act for the purposes of payment....
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.... shown in proportion of their capital investment. 3. The IAC by order dated 22.10.1983 held that there was no ambiguity in the Partnership deed dated 24.05.1974 regarding sharing of profit/loss of the partners. In the accounting year, profit should have been shared according to the term of the deed dated 24.05.1974, i.e in the ratio of 25% each. The memorandum dated 06.02.1980 revising the ratio of share could not have retrospective effect. Since the shares of the partners were not according to the term of the deed dated 24.05.1974 as such registration of the firm was liable to be refused. On these findings registration was refused by order dated 22.10.1983. The respondent filed appeals (registered as CIT (A) 137, 138/IAC(A)/Agra/1983-84) ....
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....ity in respect of share in profits/loss of the partners in it. The deed could not be rectified by a memorandum dated 06.02.1980. Since share of profits/loss of the partners in the Assessment Year 1980-81 has not been shown according to the terms stipulated in the deed dated 24.05.1974 as such registration was rightly refused by the IAC. In any case, the memorandum dated 06.02.1980 could not have any effect for the Assessment Year 1980-81. The order of CIT (A) allowing the appeal of the respondent and order of the Tribunal dismissing the appeal of the Revenue are illegal. 5. We have considered the arguments of the Senior Standing Counsel. The partnership is governed under the provisions the Indian Partnership Act, 1932. Section-4 defines pa....
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....wise also the partners can change terms and conditions under the law. Since deed dated 06.02.1980 is a rectification deed and has been executed according to real agreement between the partners, which is proved from their previous record as such objection of the IAC that the deed would have no retrospective effect, is not liable to be accepted. 6. Now we have to examine the provisions relating to the registration of firm under the Income Tax Act, which was in existence at the relevant time. Relevant portions of Section 184 and 185 of the Act are extracted below:- Section 184- Application for registration:- (1) An application for registration of a firm for the purposes of this Act may be made to the Income-Tax Officer on behalf of any firm,....
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....t reason the original instrument cannot conveniently be produced, he may accept a copy of it certified in writing by all the partners (not being minors), or, where the application is made after the dissolution of the firm, by all the persons referred to in clause (b) of sub-section (3), to be a correct copy or a certified copy of the instrument; and in such cases the application shall be accompanied by a duplicate copy of the original instrument. (6) The application shall be made in the prescribed form and shall contain the prescribed particulars. (7) Where registration is granted to any firm for any assessment year, it shall have effect for every subsequent assessment year : Provided that - (I) there is no change in the constitution of....
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....lanation ; For the purposes of this section and section 186, a firm shall not be regarded as a genuine firm if any partner of the firm was, in relation to the whole or any part of his share in the income or property of the firm, at any time during the previous year, a benamidar - (a) of any other partner to whom the first-mentioned partner does not stand in the relationship of a spouse or minor child, or (b) of any person, not being a partner of the firm, and any of the other partners knew or had reason to believe that the first-mentioned partner was such benamidar and such knowledge or belief had not been communicated by such other partner to the Income Tax Officer in the prescribed manner." 7. Section 184 (4) provides that application ....