1975 (2) TMI 9

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....ent reference are as follows : There was a Hindu undivided family carrying on business under the name of M/s. Malwa Knitting Works till March 31, 1958. On April 1, 1958, there was a partial partition between the family members and on that very day, a partnership was formed, which with effect from that date carried on the former family business. The partners of the firm were Shri Jagdishrai, advocate, his younger brother, Shri Amritlal, and their mother, Smt. Satyawatibai. This partnership firm applied for registration for the assessment year 1959-60, which was refused by the Income-tax Officer, the Appellate Assistant Commissioner and also by the Income-tax Appellate Tribunal. On a request by the assessee, the present reference was made by ....

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....an affidavit on record filed by Shri Jagdishrai, advocate, that he never participated in the business of the firm. That affidavit was not controverted on behalf of the department. It is true that the terms of the partnership deed provided a clause, which authorised Shri Jagdishrai, advocate, to act on behalf of the firm as also to actively participate in the business. But that clause, as is obvious, remained a dead letter throughout and, even according to the additional statement of the Appellate Tribunal, Shri Jagdishrai, advocate, did not actively participate in the business of the firm. We may note the actual finding recorded by the Appellate Tribunal as follows : " Therefore, it cannot be held on the evidence as it stands that the ob....