1957 (2) TMI 84

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.... of the firm is .1950-51 and the relevant year of account is S.Y. 2005 which corresponds to the period 2nd November, 1948, to 21st October, 1949. The application for registration was made on the 18th August, 1951, and that application was supported by a partnership agreement dated 26th October, 1950. In that partnership deed four partners were shown, viz., Messrs. Chandulal Dayalal & Co., Messrs. Shantilal Vrajlal & Co., Patel Nanalal, and Desai Keshavlal, and the share of each of these partners was shown as 4 annas. The partnership deed also recited that this partnership was continued in S.Y. 2006 but the share of the partners was altered and the alteration was that Chandulal Dayalal was given a share of 6 annas, Messrs. Shantilal Vrajlal ....

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....hat is pointed out is that in the first partnership deed the partners shown were two individuals Nanalal and Keshavlal and two firms Chandulal Dayalal and Shantilal Vrajlal & Co., and on the strength of a Supreme Court decision reported in Dulichand Laxminarayan v. Commissioner of Income-tax [1956] 29 ITR 535 Mr. Joshi argues that such a partnership cannot be registered under the Indian Income-tax Act. It is perfectly true that the Supreme Court has pointed out that a firm is not a person and that a firm cannot enter into a partnership with an individual because the Partnership Act requires that the contract, of partnership must be constituted by persons deciding to carry on a partnership. Therefore, to the extent that this partnership deed....

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.... actual situation. It sets right and corrects the infirmity which attached to the first partnership deed. What the first partnership deed set out was the correct position, viz., that the partners of the firm were Nanalal, Keshavlal, Messrs. Chandulal Dayalal & Co. and Messrs. Shantilal Vrajlal & Co. From a commercial point of view the two partners were Messrs. Chandulal Dayalal & Co. and Messrs. Shantilal Vrajlal & Co. Businessmen still look upon firms as legal persons, but in view of the Supreme Court decision this deed suffered from this infirmity that it did not set out the constituent members of these two firms who were the real partners and not the firms, and this infirmity was removed by the second partnership deed which set out the c....