1980 (5) TMI 25

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....bringing in a capital of only Rs. 5,000, but was given a profit share of 31 1/2%. Radhakishan Choudhury, however, left his entire interest amounting to Rs. 46,931 in the firm even after his retirement. The ITO for the assessment year 1963-64, taking the view that Prabhudayal Choudhury was only benamidar or representative of his father, the assessee, who was considered the real or beneficial owner of 31 1/2% of the profits of the firm, included the share of profits of Rs. 5,085 from the said firm in the income of the assessee. For the same reason Rs. 9,052 for 1964-65, Rs. 8,272 for 1965-66 and Rs. 8,938 for 1966-67 were included in the income of the assessee. The assessee having appealed, the AAC allowed the appeals for the assessment years....

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....he firm, M/s. Boitram Debidutt, from the assessment of Shri Radhakishan Choudhury ? " The question in Income-tax Reference No. 53175 is the same, except that it mentions the amount of share income of Rs. 8,938 for 1966-67. Mr. G. K. Talukdar, learned counsel appearing for the revenue, submits that the deletion was not justified as it was based wholly on the finding of genuineness for registration of the firm and was not on any finding as to whether Prabhudayal was benamidar of his father, Radhakishan Choudhury. It appears from the statement of the case in Reference No. 8/75 that the firm, M/s. Boitram Debidutt, filed an appeal against refusal in the registration proceeding for the assessment year 1963-64, which was disposed of by orde....

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....stant appeals to justify the deletion of the share income. Mr. Talukdar submits that the decision to allow registration of the firm holding it to be genuine did not necessarily imply the finding that Prabhudayal was not the benamidar of his father, Radhakishan Choudhury, but was a genuine partner. The Tribunal, according to him, without deciding the question whether Prabhudayal was the benamidar of his father, Radhakishan, ought not to have upheld the deletion. The submission, at first blush, appears to be logical. In CIT v. A. Abdul Rahim and Co. [1965] 55 ITR 651 (SC), it was hold (Headnote) : " When a firm makes an application under section 26-A of the Act for registration, the Income-tax Officer can reject the same if he comes to ....