2002 (2) TMI 27

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....ore, the assessee-firm is entitled for registration?" The assessee-firm, a firm of ten partners, constituted under a partnership deed dated February 9, 1979, applied for registration under the Income-tax Act, 1961, for which it filed an application in Form No. 10. In the course of assessment proceedings, the assessee brought to the notice of the Assessing Officer the fact that each of the partners had entered into a sub-partnership with others and, consequently, the share of each partner of the income of the assessee-firm would have to be shared among the partners of the sub-partnership. Significantly enough, all the ten partners have taken the very same stand. In view of the stand taken by the partners, the Assessing Officer has considere....

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....on although a partner may divide his share of profits with others were rendered prior to the amendment introduced by way of Explanation to section 185 of the Income-tax Act. The amended provision of section 185(1) was considered by the Kerala High Court in CIT v. Palliveedu Traders [1993] 204 ITR 141 as also by the Andhra Pradesh High Court in CIT v. Jayalakshmi Oil Firm [1997] 228 ITR 443 and both the High Courts have taken a view which incidentally supports the view taken by the Assessing Officer in this case. The Kerala High court in Palliveedu Traders' case [1993] 204 ITR 141, while considering the provisions of section 185(1) of the Income-tax Act, has held as follows: "On receipt of an application for registration of a firm, the Ass....