TaxTMI 
TaxTMI 
TaxTMI 
1939 (9) TMI 1
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....ication in accordance with Section 26-A of the Income-tax Act, the Income-tax authorities are entitled to go behind a deed of partnership which the persons produce and to find that the deed is bogus and to refuse to register them as a firm for the purposes of the Income-tax Act. Although the present application is made in the name of the firm showing three partners, the case has been treated by the Income-tax authorities, and indeed by the firm itself, as consisting of four partners; one of the partners, Abdul Razak, has been omitted from those participating in this application. 2. The facts, briefly, are that since 1934 there had been a registered firm consisting of Abdul Gafoor and Mohammad Yasin, each having an eight-anna share in the p....
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....ation, and that a child should be brought in on equal terms with the others in matters of profit. 3. Now, there is no prohibition in law against a child being introduced to share in the profits of the firm, and Section 48 of the Income-tax Act shows that in a firm which has been registered such a minor is equally entitled to the benefits accruing to a firm from registration, that is to say, the benefits of individual assessment, or rather the benefits accruing under Section 48 of the Act. The facts which I have set out and which indeed are not disputed do, in my opinion, constitute evidence on which the income-tax authorities were entitled to come to a conclusion that the deed of partnership newly entered into was a sham transaction drawn ....
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....that applications for registration by these alone, asserting partnership where there had formerly been joint undivided status, are the only deeds which can be open to suspicion. The latest decision is that in Haji Noor Mohammad Haji Alleemullah v. The Commissioner of Income-tax, Central & United Provinces (10 I.T.C. 426). There it was held that income-tax authorities are competent to hold as Judges of fact that a partnership which purports to be evidenced by a deed produced before them is fictitious; the only proviso appears to be, according to this judgement, that there must be some evidence on which the decision as judges of fact is reached. Undoubtedly there is evidence in the case before me, evidence which I have already described. In t....