1980 (12) TMI 71

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....assessee-firm had earlier come into existence by virtue of a deed of partnership executed on 11th April, 1974. As per this deed, the assessee had three major partners and two minors viz. Master V.S. Yavagal and Master N.S. Yavagal who were admitted to the benefits of the partnership. Shri V.S. Yavagal obtained majority on 14th Jan., 1974 and N.S. Yavagal on 4th June, 1975. On 7th June, 1975 a fresh deed of partnership was executed, providing for sharing of profits and losses to all the five partners, including the two Yavagals mentioned above. The date of commencement of this partnership was mentioned to be 1st April, 1975 on which date, Shri N.S. Yavagal was a minor but he was made a full-fledged partner. The partnership deed, therefore, b....

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....the past liabilities after this person had become a major, could be entered into by him was not sound, because he had not ratified the transactions of the firm at any time. Similarly, the Supreme Court authority in CIT vs. Ashok Bhai Chiman Bhai was distinguishable on the ground that there was no question of the validity of any partnership agreement in that case. He, therefore, set aside the assessment order and the order under s. 185 with a direction to the ITO to refuse registration and assess the assessee in the status of an unregistered firm. The assessee has, consequently, come up in appeal before us. 3. We have heard the representatives of the parties at length and, in our opinion, the order of the Commr. in question, cannot be sus....

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..... 80 ITR 283. 6. On behalf of the Department, reliance was placed upon s. 30(7)of the Partnership Act which reads as under: "7" Where such person becomes a partner (a) his right and liabilities as a minor continue upto the date on which he becomes a partner, but he also becomes personally liable to third parties for all acts of the firm done since he was admitted to the benefits of partnership, and (b) his share in the property and profits of firm shall be the share to which he was entitled as a minor." It was contended by the Deptl. Rep. that any agreement by any person, accepting any liabilities in respect of any loss, incurred by the firm of which he was admitted to the benefits during his minority would be contrary to the ab....