TaxTMI 
TaxTMI 
2010 (7) TMI 1215
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....nd in respect of all these appeals challenges the action of authorities below in holding the assessee's status as that of AOP and not that of a firm and assessee as such and thereafter disallowing the salary and interest paid to partners in all these years. (ii) Sustaining following disallowances A.Y. 2003-04: - Shop expenses Rs. 25,000/- - Out of misc./ conveyance expenses = Rs. 25,000/- A.Y. 2005-06: Ad hoc disallowance out of shop/misc./traveling/ telephone expenses - restricted to Rs. 90,000/- from Rs. 1,45,000/- A.Y. 2006-07: Ad hoc disallowance out of license fee, rent, shop expenses, vehicle running, vehicle repair, telephone expenses and traveling expenses restr....
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....and not the firm. Reliance was placed on following judgments: Bihari Lal Jaiswal Vs. CIT 217 ITR 746(SC) Moti Lal Chunnilal Vs. CIT 234 ITR 472 (SC) 2.3. Aggrieved, assessee preferred first appeal, where it was pleaded that: (i) Hon'ble Supreme Court in the case of Rangila Ram & others 254 ITR 230 has upheld the proposition that firm can be formed by joining other persons as financing partners. (ii) There was a change in law vis a vis registration of the firm in terms of sec. 184/185 w.e.f. 1-4-1994. Earlier AO had power to decide the genuineness of the fir, whereas after 1-4-1994, amended law provides that the firm shall be granted registration if a certified copy of duly executed partnership deed, be....
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....istration of the firm and directed to tax the assessee as AOP. Aggrieved, the assessee is before us. 2.6. Learned counsel for the assessee reiterated the arguments and case laws referred to before CIT(A) and contends that above Supreme Court cases in the cases of Bihari Lal Jaiswal and Moti Lal Chunnilal (supra), were not applicable in view of the specific amendment in section 184 for registration of the firm i.e. from 1-4-1994. The amended procedure for registration prescribes only furnishing of certified copy of the partnership deed duly signed by all the partners declaring the shares of the partners in the firm, which has been duly complied with by the assessee. Due to amendment in the law, in the given circumstances, assessee firm ca....
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....ing individual partners to apply for liquor licenses in their names for and on behalf of firm, it cannot be held to be illegal and refused registration. As per section 4 of the Partnership Act, a partnership firm is a contract between the partners to carry on the business in the name of firm for and on its behalf. In view of section 4 of the partnership and declared liquor policy in U.P., amendment in section 184, the assessee having complied with the requirement of registration of firm as per the amended sections 184/185, the firm shall be granted registration. 2.8. Learned counsel relied on the order of ITAT Bangalore Bench in the case of DCIT Vs. H.E.D. Bros. & Co. (2005) 1 SOT 881, which in similar circumstances has held as under: ....
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....ent of the learned counsel. From 1-4-1994 sections 184/185 have been amended and the earlier procedure of examining genuineness of firm has been dispensed with. As per the amended law, the firm shall be allowed registration if a certified copy of a deed, duly signed by all the partners showing the shares of the partners is filed, the firm is allowed to be registered. U.P. Excise policy does not prohibit constitution of partnership firm for carrying liquor business, so also licenses obtained by individuals can be converted into partnership firm on compliance of certain requirements. In vie of these facts and legal propositions, the assessee firm having constituted specific clause 11 as mentioned above, it cannot be held that it is a non-genu....