TaxTMI 
TaxTMI 
1949 (9) TMI 18
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....ch parties agree, and refer it to the High Court of Judicature at Bombay under Section 66(1) of the Indian Income-tax Act. These applications relate to the assessments for the years 1939-40, 1940-41, 1941-42 and 1942-43. The questions of law raised are the same in all these applications. 2. The assessee is a registered firm consisting of Jesingbhai and his two sons, Mangaldas and Manilal. On the death of Mangaldas on 6th December, 1941, his son Shantilal was taken as a partner in the assessee firm. The firm came into existence in 1924. It does business at Ahmedabad. Its business is in sarafi, insurance, brokerage, cotton, etc. The material partnership deed is dated 26th January, 1934. According to it, there are three partners, each one h....
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.... was done by a branch of the Ahmedabad firm. The Tribunal relying on the definitions of "firm," "partner" and "partnership" in the Indian Income-tax Act and on the case of Vissonji Sons&Co. v Commissioner of Income-tax, Central[*] , held that the partners of a firm doing a business could not constitute a firm by having different shares in the profits of another business. The attention of the Tribunal was drawn to relevant evidence but it did not examine it. It held, as pointed out just now, that the same partners could not constitute firms by different shares in different businesses. The Tribunal treated the question as a pure question of law and allowed the appeals filed by the department against the orders of the Appellate Assistant Commi....
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.... of the partners which is dated the 26th of January, 1934. According to this partnership deed, the shares of the three partners are 5 annas each and 1 anna is reserved for charity, but as that share is completely under the control of Jesingbhai it has been found by the department, and that finding is accepted by the Tribunal, that that share really belongs to Jesingbhai. Therefore, the shares are 6 annas to Jesingbhai and 5 annas each to the other two partners. These three partners also carried on another business at Bhavnagar and this business was commenced in 1918 and the shares of the three partners are equal. The question that arose for the determination of the Tribunal was whether these two partnerships constitute two different firm....
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.... fact there was only one firm in law. With great respect to the learned Chief Justice, the actual question that he had to consider in that reference was whether a certain item which the assessee claimed as a bad debt was a bad debt or not, and the learned Chief Justice disposed of that reference by coming to the conclusion that this question was really a question of fact and the only question of law that arose was whether there was sufficient evidence to justify the finding of fact by the Tribunal. Therefore, this particular observation on which the Tribunal has relied was not called for the determination of the reference and therefore it must be looked upon as a pure obiter. As against this obiter there are two decisions to which Sir Jamsh....
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.... businesses of the same firm was a question of fact to be determined by the Tribunal. A similar view was taken by the Lahore High Court in the case of Krishna Ginning & Pressing Factory v. Commissioner of Income- tax, Punjab(2). In that case, under the same partnership deed two separate businesses were to be carried on, and the question that arose for determination was whether two separate firms came into existence under the same partnership deed or only one firm, and on the construction of the partnership deed the High Court at Lahore came to the conclusion that there was only one firm and not two firms. The very fact that the Lahore High Court considered this question clearly shows that according to that High Court in law there could be t....