2002 (7) TMI 100

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....t, 1961, the Tribunal has referred the following question for the opinion of this court: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that on filing of the revised return distribution of enhanced profits is required for continuance of partnership firm as registered under section 184(7) of the Income-tax Act, 1961?" The assessee has claimed th....

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....ppeal the Appellate Assistant Commissioner has allowed the appeal holding that once the partners have certified for distribution of the profits amongst them, registration should be granted. In appeal before the Tribunal, the Tribunal came to the conclusion, that there is no distribution of enhanced profits in accordance with the declaration under section 184(7) of the Act and therefore restored....

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....submits that when the original return has been filed, declaration under section 184(7) has been furnished along with the original return. In the original return, the income shown was Rs. 21,060 and in the revised return, the income shown was Rs. 40,625. When the declaration of income shown was only Rs. 21,060, no further declaration was furnished though the income was shown as Rs. 40,625. Therefor....

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....r has certified that the income and the profits are distributed as per the partnership deed that is not enough, once the finding is there that the assessee has failed to prove that the partners have acted as per the terms of the partnership deed, the firm is not genuine and when the firm is not genuine, there is no question of continuation of registration. It is also pertinent to note that in earl....