1997 (5) TMI 27

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... of the Income-tax Act, 1961 ?" The Assessing Officer in his order passed under section 185(1)(b) of the Act held that the partnership deed is defective and the firm is not entitled to registration. The constitution of the assessee-firm is as under : 1. Sri Sechan Ram S/o Late Hari Das All major partners 20% 2. Sri Ghasi Ram S/o Sri Ganga Ram " 07% 3. Sri Puhawashi Prasad S/o Ghasi Ram " 13% Besides the major partners following minors were also admitted to the benefits of the partnership : 1. Ram Kumar S/o Khyal Chand All minor partners 20% 2. Pradeep Kumar S/o Ram Shog " 20% 3. Deepak Kumar S/o Kashi Nath " 20% Clause 5 of the partnership deed is as under : "That at the close of each year the account of the....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... "In our view there is no scope for interference in the order of the assessee. The case of the Supreme Court reported in Mandyala Govindu and Co. v. CIT [1976] 102 ITR 1 is clearly distinguishable as in that case there was no reference to sharing of losses of the firm by the partners in the partnership deed while in the case before us so far as the minor's liability for losses is concerned, a specific clause has been inserted indicating therein that he shall be minor liable to the loss to the extent of his share according to section 30 of the Indian Partnership Act. . . . The only interpretation that was possible is that the minor will be liable for losses as per the provisions of section 30(3) of the Indian Partnership Act and he will not ....