TaxTMI 
TaxTMI 
1995 (10) TMI 31
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....--------------------------------------------------- Sl. No. Name of the partners Share in profits Share in losses --------------------------------------------------------------------------------------------------------------------------------------------------- 1. Ramchandra Gupta 17 per cent. 25 per cent. 2. Hiralal Agrawal 17 per cent. 25 per cent. 3. Ramesh Kumar Gupta 17 per cent. 25 per cent. 4. Ram Kumar Gupta 17 per cent. 25 per cent. 5. Om Prakash Goyal 16 per cent. Nil as minor. 6. Balkishan Goyal 16 per cent. Nil as minor. --------------------------------------------------------------------------------------------------------------------------------------------------- On January 5, 1974, one of the two minors admitted to the benefits of partnership, viz., Om Prakash Goel, attained majority and elected to continue as a partner vide supplementary agreement dated January 6, 1974. As per clause 2 of the said supplementary agreement, clause 5 of the original deed of partnership dated November 6, 1972, stood amended as under : ----------------------------------------------------------------------------------------------------------------------------------------------....
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...., the same would amount to change in the constitution of firm and in that case, the assessee would have to apply for fresh registration under section 185 and accordingly the declaration given in Form No. 12 seeking continuation of regis tration under section 184(7) was not in order. Section 184(8) clearly provides that where any change in the constitution has taken place in the previous year, the firm shall apply for fresh registration for the assessment year concerned in accordance with the provisions of this section. The Board's circulars cited by the assessee are only in respect of cases where a minor admitted to the benefit of partnership becomes a full-fledged partner. It has been provided that where there is no change in the profit/loss sharing ratios a new partnership deed may not be necessary. The same would not be applicable to the facts of the instant case where there had been change in the profit/loss sharing ratios and, therefore, in view of the clear provisions of sections 187(2) and 184(8), the assessee should have sought fresh registration for the assessment years 1976-77 and 1977-78 and a declaration filed in Form No. 12 for these two years was not in order. The Inc....
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....ust 4, 1977, was subsequent to the decision in the case of CED v. Smt. Ram Sumarni Devi [1984] 147 ITR 233 (sic). Therefore, it is presumed that the Board has taken into consideration the subsequent decision of the Allahabad High Court. The view taken by the Tribunal does not appear to be justified. It may be relevant to mention here that there was a conflict of judicial opinion in the Allahabad High Court regarding interpretation of this provision of the Act. In the earlier decision of the Allahabad High Court in the case of Ganesh Lal Laxmi Narain v. CIT [1968] 68 ITR 696, the Allahabad High Court took the view that whenever a minor is admitted for the benefit on attaining majority and is inducted as partner of the firm, change takes place in the constitution and the firm must apply for fresh registration under section 184(8) of the Act. This view was followed in the judgment in CED v. Smt. Ram Sumarni Devi [1984] 147 ITR 233 (All) (sic). Therefore, the Board keeping in view this judgment, issued circular on March 20, 1969. Both these judgments came up for consideration before the Full Bench of the Allahabad High Court in the case of Badri Narain Kashi Prasad v. Addl. CIT [1978]....
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....of the Full Bench of the Allahabad High Court in Badri Narain Kashi Prasad v. Addl. CIT [1978] 115 ITR 858. Shri Nema, learned counsel for the non-applicant, submitted that in the present case, the situation is different here. Here a supplementary partnership agreement has been drawn up and the minor has been admitted to the benefits. It has been referred that there was no execution of the supplementary partnership agreement and in that event, there is no change in the position. A supplementary agreement is nothing but a new partnership agreement so far as induction of a new partner is included. Under section 30 of the Partnership Act, minor is only admitted to the benefit of the partnership benefit only as the minor cannot be inducted as partner. Now when Om Prakash Goyal has become major and been inducted as partner, he will equally share the profits and losses in the firm. It is true that in cases where there is a stipulation that the minor upon becoming major will become a full partner in that case no separate agreement is required and there will be continuation of registration, but in the present case, there is no such stipulation that a minor becoming major will continue to ....